Personal Injury Law

Types of Settlements in Personal Injury Law

A personal injury settlement refers to the terms of the agreement that a person, who has suffered an injury due to someone else’s act or negligence, reaches with that party. Individuals agree to stop any further legal activity in exchange for monetary damages. The individual may also dismiss any outstanding legal claims for the settlement amount in exchange for some benefits.

Types of Settlements in Personal Injury Law

In a personal injury case, the amount of money an injured person receives determines whether it is significant or small. The settlement type depends on the severity and extent of injuries, damages incurred, and applicable legal procedures.

1) Lump Sum Settlement

A lump sum settlement is the most common settlement between an injured person and a responsible party (the party who caused the injury). This settlement is usually calculated based on a percentage of per-day earnings lost by the injured person to compensate for lost wages, medical expenses, and other relevant losses. A lump sum payment does not include any benefits for future medical expenses or any future loss of income.


1. Lump sum payments are usually easier to come by than other types of settlements.

2. The lump sum payment can be received in one installment, which can benefit the victim when they have a mortgage or other expenses that need paying off.

3. The lump sum payment is usually less than the total amount of the case, so injured victims receive some money right away and avoid going through a long and expensive court process with an uncertain outcome.

4. The plaintiff (the injured party) can use the funds to pay off any expenses resulting from the accident.

5. The lump sum payment can be distributed to family or friends if the plaintiff dies due to the injury or decides not to pursue the legal case.


1. A lump sum settlement is usually less than what the plaintiff would have received if they had won a more significant case.

2. The plaintiff may not realize the full extent of their injuries and may feel cheated by a smaller settlement amount.

2) Structured Settlements

Structured settlements are usually structured to be paid over some time, though they can be paid in one lump sum as well. Structured settlements generally depend on the individual’s income and usually include a monthly amount for revenue lost due to the injury.


1. The structured settlement is beneficial because it can provide an additional source of income and help the victim recover from their injuries without having to return to work.

2. The victim usually receives some income, even if they’re sick or unable to work, and can accept payments regardless of the case’s outcome and state of the individual’s health.

3. The structured settlement funds can be used to pay off any medical or legally related expenses incurred by the victim that is not reimbursed by insurance.

4. The structured settlement is an excellent way for victims to secure money for their futures without worrying about their legal cases and their ability to prove damages.


1. The structured settlement can be complicated, and the process of structuring the payment and distribution is usually expensive.

2. Some victims may agree to a structured settlement to receive money more quickly, but they may not be aware of any future complications associated with the structured settlement.

Factors Used to Determine the Amount of Settlement

1. Cost of treatment: Most medical bills are incurred by an injured victim in the first week, so the cost of treatment can be a significant factor in determining an amount.

2. Severity: The severity of one’s injuries will determine how much money the victim can receive.

3. Formality of injury: A formalized damage occurs while on the job or in school and may result in significant lost wages, physical pain, and time off from work or school.

4. Dependents: Whether an individual was injured while working or on the job, there are usually bills and expenses to be paid. The settlement amount can vary depending on whether an individual is married or has dependents.

5. Contributions to the settlement: If an injured individual wasn’t responsible for any of their damages, this could be considered when determining the settlement amount.

6. Property damage: Often, in cases involving personal injuries that result in property damage, there is a basis for punitive damages.

There are many different types of injury settlements, each with its advantages and disadvantages. Victims of personal injuries and their attorneys should be familiar with the possible types of payments, so they can better evaluate their cases and determine the most vital course of action. A Fort Walton Beach personal injury attorney will know the different types of settlements and will be able to decide on what each is best suited for.

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