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Car accident victims must be careful to protect their settlements

On Behalf of | Sep 1, 2022 | Car Accidents, Firm News

If you have a car accident, you may suffer serious injuries. These injuries can cause lifetime debilitating conditions and may make you unable to work.

If another party is at fault, you may recover damages to help with medical costs, future treatment and other living expenses. If you negotiate a structured settlement from the insurance company, you should take care to protect your future stream of income.

How cash payouts work

A structured settlement will pay you monthly for some time, sometimes until your death. You do not receive an immediate large sum of money in this situation. Companies offer to buy out structured settlement payments for a lump sum of cash from accident victims.

A company seeking to buy out your structured settlement must apply to the court for approval. Judges routinely approve these arrangements with little protection afforded to the injured party.

Reject offers for cash buyouts

You may think you want or need cash immediately rather than waiting for your structured settlement payouts. You should know that offers from companies that buy structured settlements are typically well below the value of the payment. You should also use caution in making arrangements after suffering trauma from an accident. You may have a brain injury that impairs your ability to think clearly. You will forfeit your future income stream under the structured settlement if you take a cash payout.

Companies that offer you a cash payout are not looking out for your best interest. Proceed with caution, so you do not give away your future income for pennies on the dollar.