A car accident settlement is a formal agreement between the victim and the insurance company to pay your claim for damages. In return for a cash payment, you agree that the settlement is final – that you won’t seek any more money from the defendant’s insurance company.

You should never negotiate a settlement on your own. The insurance company for the defendant is not your friend. They want to pay you as little as possible. Victims who settle on their own could have received much more by contacting an experienced car accident attorney.

How do you negotiate a car accident settlement?

There are two parts to your Knoxville car accident claim:

Liability

In order to receive compensation for your injuries, we need to show that another driver caused your accident. Common causes of car accidents in Tennessee include speeding, drunk driving, driver distraction, and driving while fatigued. In some cases, other defendants may also be liable. These      defendants may include other drivers, a driver’s employer, a manufacturer of defective car parts, and other defendants.

Damages

Before we negotiate a settlement of your personal injury claim, we review the full scope of your injuries with your doctors, your financial losses, and the damage to your vehicle. Car accident damages in Knoxville include all your current and future:

• Medical expenses
• Lost income and benefits
• Physical pain and emotional suffering
• Property damage
• Loss of quality of life
• Loss of bodily function
• Loss of consortium (enjoyment of marital relations)

In unconscionable cases, such as when a drunk driver causes an accident, you may also be entitled to punitive damages. If a loved one dies, we demand that the insurance company pay the decedent’s wrongful death damages.

We prepare a demand letter explaining why we believe the insurance company’s policyholder (the defendants) is liable. Our demand is based on the strength of your case, the total of all your damages, whether you have a catastrophic injury or any injury that is not expected to heal, and what juries have awarded in similar cases (or what similar cases have settled for).

Another factor that determines the value of your settlement is the amount of insurance coverage.  For example, if your claim is worth $200,000, but the driver who struck you didn’t have insurance or only had $25,000 in coverage (the state minimum), then we may settle with the driver’s insurance company for $25,000 and proceed against your own uninsured/underinsured (UM/UIM) carrier for the balance of your claim ($175,000) up to the policy limits of your coverage.

If there are multiple defendants in your car accident claim, we may settle with all the defendants or we may settle with some but not all the defendants. If there are any defendants who don’t agree to a settlement, we may proceed to a jury trial for the defendants who refused to settle your claim.

What are the advantages of a settlement?

The advantages of a settlement are:

• You know how much you’re receiving. While we take pride in our ability to try car accident cases before juries, there are no guarantees. A lot depends on the strength of your liability claim.
• If you settle, you’ll receive your settlement check shortly instead of having to wait for your jury trial to be heard.
• A settlement means that you don’t have to appear in court.

The flip side to these advantages is that jury awards are generally higher than settlements. Some accident victims feel more satisfied if a jury confirms the defendant was wrong.

When do I receive the settlement proceeds?

Once Banks & Jones comes to an agreement (with your approval) to settle your accident claim, the following steps are used to formally resolve your claim:

• The agreement. Normally, once we present the insurance company with our demand, the insurance company will make a counter-offer. If the case is clear-cut (your claim is clearly worth more than the policy limits), the insurance company may agree to pay your claim up to the policy limits. If there is a counter-offer, we’ll review each offer we make and each counter-offer the insurance company makes with you – until both you and the insurance company agree to a specific dollar amount.
• A release. Once there is an agreement as to a specific dollar amount, a release will be prepared that states the terms of the agreement. The terms are that you will receive the negotiated amount in return for agreeing not to pursue your claim any further against the insurance company’s client (such as the driver who struck you).
• Receipt of the funds. The insurance company will, usually after a week or two, send the check for the agreed-upon amount to our firm.
• An accounting and distribution. We’ll prepare a document/letter that explains what happens to the money – how much we receive, how much you receive, and how much is paid to anyone else. For example, if your doctors agreed to wait until your case was settled to be paid, money will be set aside for those doctors. You’ll receive your check at this time.

In some cases, the settlement may be structured. Generally, a structured settlement is used for minors and accident victims who will need long-term medical care. For minors, their settlement proceeds are placed in a trust or fund until they turn 18. A trustee pays the medical bills as they become due. For adults, the money is used to pay for the medical care as it becomes due. Some funds may be distributed to the adult for their enjoyment.

Generally, car accident settlement proceeds are not subject to federal income tax. Punitive damages may be subject to federal income taxes.

At Banks & Jones, we’ve helped many car accident victims obtain substantial jury awards and settlements. We’re able to settle many personal injury claims because insurance companies respect our record of success in the courtroom. We can help you obtain the strongest settlement possible. Please call us or complete our contact form to schedule a free consultation.