One of the most common questions a personal injury lawyer will field is "What happens if we win? How will they pay?" It's a good idea to think about what might happen if your claim or suit is successful so here are four ways you might receive your compensation.
Lump-Sum Payment From an Insurer
This scenario presumes that an insurance adjuster has approved a claim. Generally, the company will pay the claim out as a lump sum only if they consider it small by their standards. If the compensation is $20,000, for example, the insurance company might send you a check for that amount.
Bear in mind the transfer can be held up by parties that have claims to part of the money. For example, a hospital might issue a medical lien to cover unpaid bills.
Especially with bigger settlements, the insurer may want to send compensation on a structured schedule. This might be set up as an annuity, a financial vehicle that releases the payments annually or on another particular basis. Insurers do this to spread out the financial hits from many settlements across many of their customers.
Notably, the annuity brings another insurance company into the equation. When the injury insurance firm makes arrangements for the annuity, they'll typically set up the annuity with a life insurance company. The annuity is then owned and administered by the life insurance provider, and the claimant becomes the beneficiary.
Normally, it is the defendant's duty to make payment arrangements as part of a court-ordered judgment. If an insurance company rejected the case and you sued, the payment process will be similar to the one used to settle claims.
Things get a little stickier if the defendant is uninsured or self-insured. The defendant still has a duty to make payment arrangements, and they're supposed to sort that out with the plaintiff and their personal injury lawyer. A self-insured company can still purchase an annuity and use it to pay out the claim.
Liens and Garnishments
If a defendant can't afford to pay or refuses to do so, you may have to go back to court to get an order against them. The judge has two tools at their disposal: liens and garnishments. A defendant's assets and accounts can be transferred to the plaintiff, or they can be sold. The court may also order the garnishment of the defendant's wages to make payments.
For more information on how successful injury cases are paid, talk to your personal injury lawyer.