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What personal injury victims should know about settlement offers

| Apr 1, 2021 | Personal Injury

An accident that causes injuries can be a legal and financial headache for a New Jersey victim. Even if their own actions had nothing to do with the cause of the fall, crash, or other dangerous event, they may find themselves investigating their possible claims to figure out how they will pay for their medical bills and other losses. Accidents are expensive, and victims should not be left to foot their own bills.

In some accident cases, though, victims will receive offers of settlement that may initially appear to save them from the overwhelming problem of paying for their expenses. Settlements often come from the insurance companies of the parties who caused the victims’ harm. For example, a car insurance company may offer to settle a victim’s claim that arose from an accident caused by one of the insurer’s covered parties.

Before accepting the terms of a settlement, a victim should understand what a settlement is and what rights they may give up as a result of their acceptance. It is important that victims receive case-specific counsel, and they can choose to retain the representation of trusted New Jersey-based attorneys for help.

What is a legal settlement?

A settlement is a kind of contract, and like all contracts, it involves an exchange between the parties. Generally, a settlement made pursuant to a personal injury claim will extend a financial offer to a victim. In exchange for money, the victim may be required to waive their future rights to sue the responsible party and their insurer for their losses arising from the underlying accident. Settlements can be accepted, rejected, or negotiated.

Why may a settlement be detrimental to a victim’s interests?

Getting accident-related compensation without having to go to trial may seem like a win-win for a victim, but before they jump at a settlement offer, they should fully understand what they will not be able to do once they sign. After accepting a settlement, a victim likely will not be able to seek more money from the other party or their insurer, leaving them limited in their recovery to what was included in the settlement.

For example, readers are asked to consider a victim who suffers serious injuries in a motor vehicle accident. Within weeks of their accident, they receive a settlement offer of $100,000 from the insurer of the responsible party. The sum seems like a lifesaving amount to the victim, and so they immediately accept it. However, over their months of recovery, the victim actually suffers losses in excess of $250,000 due to their inability to work and their growing medical bills. Their settlement is insufficient to cover their total losses and they may be unable to seek more.

Settlements can be efficient and effective tools for recovering damages. They can also limit victims to what they are able to secure from responsible parties and their insurers. This post does not provide any legal advice. All concerns and questions about settlements in personal injury cases should be discussed with trusted local lawyers.