Experiencing an injury at work can lead to a range of complex emotions. You may feel stressed, overwhelmed, and uncertain about the future. Accepting a workers’ comp settlement from your employer’s workers’ comp. insurance company may feel like an easy way to reduce your anxieties and make up for some of the accident’s impact.
While the lump sum offer from the insurer may look tempting, it may not be fair or adequate. Think carefully before accepting a workers’ comp settlement and partner with a workers’ compensation lawyer in New York who can properly advise you.
What Is a Workers’ Compensation Settlement?
When you become injured on the job, you have the right to file for workers’ compensation through your employer’s insurance company. Workers’ compensation should cover medical expenses and a portion of your lost salary related to your injury.
A workers’ comp insurance company may attempt to reach a settlement with you instead of going through the often lengthy process of litigating the claim. In this circumstance, a settlement would often consist of a lump sum payment. By accepting a settlement, you lose the right to seek additional workers’ compensation benefits for the injury.
Insurance companies make settlement offers to streamline the claims process and to save money. You may feel that accepting a settlement is the easiest way to start moving on. However, the insurer’s first settlement offer may not properly compensate you, and accepting it could cause you to lose out on compensation the insurer rightfully owes you.
Carefully considering a workers’ comp settlement with the help of an experienced attorney can help you weigh the pros and cons of accepting it. The alternative is to negotiate a higher settlement or continue with the litigation of your claim.
Factors To Consider Before Accepting a Settlement
Accepting a settlement offer can be a challenging decision. You may need funds to pay for your medical treatment and making up for lost income. This may tempt you to accept an early offer. But you also feel unsure whether you could increase your payout by attempting negotiations.
To aid this decision, consider all of the following factors before accepting a settlement agreement.
The Value of Your Case
Understand the potential value of your workers’ compensation claim before considering the settlement offer from the insurance company. You don’t want to be dazzled by an impressive-sounding offer without understanding how much of your expenses it will cover.
Workers’ compensation should cover the following:
- A percentage of your lost wages while your injury keeps you away from work
- Medical expenses related to treating the injury
- Potential compensation for permanent disability, impairment, or disfigurement
An attorney can calculate a rough dollar amount for each of these expenses. This involves projecting future expenses for the remainder of your recovery.
Under workers’ compensation law, workers’ comp in New York does not directly cover non-economic damages like pain and suffering.
Your Projected Recovery Timeline
How long will it take to reach a full medical recovery? While this timeline can be challenging to accurately predict, it affects the value of the workers’ compensation case. You must think about the long-term impact of the injury to understand whether a workers’ comp settlement is right for you.
Speak to medical professionals about the anticipated recovery timeline and the types of treatments you may need moving forward. Factor future medical costs, physical therapy, medications, and other treatments into the overall case value. Also, try to determine at what point in the recovery process you would be able to return to work.
How Long the Settlement Would Last You
Once you understand how much your case is worth, you can examine the insurer’s settlement offer and determine how long it would reasonably last you. Will it provide sufficient funding for the remainder of your recovery? If not, you may qualify for a higher settlement.
The Impact of Inflation on the Case Value
Inflation means that the value of a dollar today is higher than the value of a dollar in the future. If you have a lengthy recovery ahead of you and the insurer is paying out long-term expenses, consider how inflation factors into the settlement value.
As an example, perhaps you expect the injury to cost 50,000 per year over the next three years. A $150,000 settlement would suffice if inflation did not exist. However, under the average annual inflation rate of 3.28%, $50,000 today will only be worth about $45,000 in three years. You need a settlement that will adequately account for expenses as long as it takes you to recover.
How the Accident Affects Future Earning Capacity
If you worked a labor-intensive job prior to the accident, you may not be able to reasonably return to the same position for some time, if ever. This may mean you need to switch careers and potentially face a lower earning capacity. Be sure to factor this element into the total cost of the accident and how it will affect your finances in the long run.
Times When You Should Accept a Settlement Offer
So, when is it reasonable to accept a lump sum workers’ comp settlement?
- The offer sufficiently covers the direct expenses of the accident.
- Medical professionals anticipate a short recovery that should allow you to return to your previous position.
- You need compensation now and cannot afford to spend time negotiating a higher offer.
- You likely will not need additional medical treatment.
- An experienced attorney has advised you to accept the offer.
Meanwhile, you may want to avoid a workers’ comp settlement that:
- Does not sufficiently cover current and future expenses
- Does not align with the average settlement for similar injuries and accidents
- Fails to account for lost earning capacity if you need to switch careers
Remember that a lump sum settlement is not your only option for workers’ comp. It is recommended that you consult an attorney before accepting any settlement money from a workers’ comp insurance claim.
What If a Settlement Offer Isn’t Sufficient?
If the insurance company’s settlement offer does not sufficiently cover your expenses, you do not have to accept it. You may be able to negotiate a higher offer with the help of an experienced workers’ comp attorney.
Attorneys use effective negotiation tactics to increase insurance settlements. They can present additional evidence of your case value and request a higher offer that more adequately covers your expenses.
If the insurance company refuses to provide a sufficient payout, you may consider litigating your claim offer. An attorney can guide you through the legal process as well.
Our Attorneys Can Inform You About The Workers’ Compensation Process
Knowing when to accept a workers’ comp settlement vs. negotiating litigating your claim can be stressful. You aren’t a legal professional, so it makes sense that you may not know the right steps to take to improve your claim. But at Pyrros, Serres & Rupwani, we are legal professionals who have extensive experience helping clients like you maximize workers’ comp settlements.
Whether you need help understanding how to start a workers’ comp. claim, want to calculate the value of your claim, or simply need guidance through the workers’ comp process, we are here for you. Contact us today at 718-626-7730 to schedule a free case evaluation.
