How Are Settlement Amounts Calculated In Personal Injury Cases?
A settlement amount is calculated based upon estimates made by the parties in terms of what a jury in the associated jurisdiction is likely to award for the particular case. There is no mathematical formula for calculating personal injury damages, aside from adding the medical bills, lost wages, and an estimation of what a jury might award for pain and suffering. There are other types of damages, but you need to talk to your lawyer to see which you may be eligible for.
How Do You Calculate Damages For Pain And Suffering?
Pain and suffering damages are not determined by a mathematical formula. Instead, they are dependent upon the quality of the medical reports that you get from the doctors providing the treatment. If you have a case where the doctor is willing to write a quality report about the future effects of your injuries, then you will stand a far better chance of getting a significant award for pain and suffering. If the doctors are not willing or able to cooperate in writing a comprehensive report, then your chances of getting substantial pain and suffering damages start to decrease.
How Are Personal Injury Settlements Paid Out?
Personal injury settlements are typically paid out in one lump sum. Sometimes parties will negotiate for an annuity, which is a stream of payments over time. It really depends upon your financial situation, but most people do elect to get and should get their settlement dollars in a single lump sum amount.
Do I Have To Pay Taxes On A Personal Injury Settlement?
You typically do not have to pay taxes on personal injury settlements unless the settlement is only for lost wages, in which case you may have to pay income tax for those lost wages. In Kansas, however, most personal injury settlements are not taxable because the settlement proceeds are made up of a sum of dollars consisting of pain and suffering, medical bills, lost wages and other types of damages. The courts have ruled that those types of settlements are not taxable. With that said, I always advise my clients to report to their accountant the dollar amount and the fact that the source is from a personal injury settlement. Your accountant will know what to do with that on the tax return.
Can I Reject A Settlement Offer?
You can reject any settlement offer that has been made by the opposition as long as you have not already accepted the settlement offer. Once an offer has been made and you have accepted that offer, you have a binding contract with the insurance company. As a result, you can’t retract that without serious potential consequence. So, you have to be really careful about accepting the settlement of a personal injury claim; be sure that what you decide is your final answer.
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