When you are facing the financial consequences of being hit by a careless driver, almost any financial relief is welcome. Unfortunately, the time right after a wreck is a bad time to make decisions about financial matters, particularly if you are doing so without a personal injury attorney. Money matters after an accident may feel too difficult to deal with and this can lead to making mistakes. Read on to find out more about the financial arrangements that should be considered after a car accident.
Ways to Get Paid
When you have been hurt by another driver, there is more than a single way to be paid. Ask your personal injury attorney about the following options:
1. The insurance policy of the at-fault driver covers your medical expenses and fixes your car.
2. The insurance policy of the at-fault driver pays a settlement that covers medical expenses, property damage, pain and suffering, and lost wages.
3. Civil law procedure awards you a judgment (money).
As you will find by discussing your case with an attorney, option #2 is the most favored of the choices. Accepting a settlement means that you won't need to undergo a court case or wait very long to be paid. It also means that more of your damages are covered. When it comes to settlements, you may be offered a structured settlement. This way of accepting compensation has several benefits to you, including:
Higher Offers – A structured settlement allows the insurance carrier to extend the financial obligation out rather than making a large lump sum payment to you. Since the financial outlay is less of a burden, they may be more willing to increase the total settlement amount if you agree to a structured plan for disbursement.
Tax Burden – Be sure to understand the implications before agreeing to a settlement. In some instances, using a structured settlement reduces your tax burden on the taxable portion of the award. Compensatory damages are not taxable, but punitive, future medical, and interest penalties might be. Speak to a tax accountant.
Extend the Benefit – There is a tendency to spend the money you have, so a structured settlement might encourage you to budget more carefully. If you have less self-control, this method ensures your money will last your lifetime. Additionally, if your health worsens and you are unable to work, this type of plan might finance an early retirement.
To find out more about structured settlements, speak to an auto injury attorney.