How Does a Personal Injury Structured Settlement Work in California?

If you’ve filed a claim for compensation after being injured due to someone else’s negligence in California, you may not need to go to court to receive said compensation. Often, it’s possible (and desirable) to arrive at a settlement agreement with the negligent party’s insurance company.

The settlement is designed to compensate you for damages incurred as a result of the injury. These may include medical bills, lost wages, pain and suffering, and other related expenses.

This overview will take a closer look at how a structured personal injury settlement works in California. It’s an option that may be available in some circumstances.

What is a Structured Settlement?

A structured settlement is a type of settlement that is paid out over time. Instead of receiving a lump sum one-time payment, with a structured settlement, you will receive regular payments over a set period of time. These payments can be made on a monthly, yearly, or other regular schedule, depending on the terms of the settlement agreement.

Structured settlements are often used in personal injury cases because they provide a number of benefits to both the plaintiff and the defendant. For the plaintiff, a structured settlement provides a steady stream of income over time. This may help ensure financial stability and security. For the defendant, a structured settlement reduces the immediate financial burden.

How Does a Structured Personal Injury Settlement Work in California?

In California, state law governs structured personal injury settlements. Under California law, a structured settlement must meet certain requirements in order to be considered valid. These requirements include:

• The settlement agreement must be in writing and signed by all parties involved.
• The settlement agreement must specify the amount of the settlement and the schedule of payments.
• The settlement agreement must be approved by a court or other authorized entity.

Once all parties agree upon a structured settlement, the defendant typically purchases an annuity from an insurance company. The annuity is designed to provide the regular payments specified in the settlement agreement. The plaintiff then receives regular payments from the insurance company over the set period of time.

Benefits of a Structured Settlement in a California Personal Injury Case

Along with the benefits already mentioned, additional benefits a structured settlement may provide include:

• Financial Security: A structured settlement provides a steady stream of income over time, which can help to ensure financial security for the plaintiff.
• Tax Benefits: In most cases, structured settlement payments are tax-free. This can help to reduce the overall cost of the settlement and provide additional financial benefits to the plaintiff.
• Flexibility: Structured settlements can be tailored to meet the specific needs of the plaintiff. For example, the payments can be adjusted to account for inflation or to accommodate changing financial circumstances.
• Certainty: A structured settlement provides certainty for both the plaintiff and the defendant. The plaintiff knows that they will receive regular payments over a set period of time, while the defendant knows exactly how much they will need to pay out.

Contact a San Francisco Personal Injury Attorney

If you’re seeking compensation after being injured as a result of another party’s negligence, be aware that your odds of securing said compensation may be greater if you have proper representation from a legal professional. Your lawyer can also discuss the pros and cons of a structured settlement in greater detail.

At Allegiance Law, a San Francisco personal injury lawyer is on hand to review your case and discuss your options. Learn more about what we can do for you by contacting us online or calling us at 415-404-6395.

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