Advantages & Disadvantages of Settling Your Workers’ Compensation Claim

Most of us need to work for a living. For this reason, any on-the-job injury can leave a worker struggling financially. They cannot afford to pay for expensive medical care, and they are in too much pain to quickly get back to work.

Helpfully, workers’ compensation benefits should be available if you were injured while working. These benefits entitle you to medical care without cost to you. You might also receive indemnity benefits to replace some of your lost wages. If you are too injured to return to work, you should receive benefits.

Many injured workers will be offered a lump sum settlement after filing a workers’ compensation claim. This means you will get all the money up front in one payment. You should think carefully about whether to accept a lump sum settlement offer. Below, our Arizona workers’ compensation lawyer looks at some of the advantages and disadvantages of agreeing to settle. As always, reach out to us, (877) 370-5788, to talk with a seasoned attorney about your workplace accident.

Advantages of a Settlement

Let’s look at some of the benefits/advantages of settling.

1. You Can Receive Benefits Faster

A settlement is an agreement between you and your employer’s workers’ compensation insurer. When you settle, you reach an agreement outside of court for how much you will receive in benefits. Without a settlement, you might have to wait around for your case to be heard by an administrative law judge or a judge on appeal.

By settling, you will gain access to benefits much faster. For people who cannot work, this is an excellent opportunity. You might have bills piling up at home—college tuition, home mortgage, and so on. By settling your claim, you gain faster access to benefits than if your claim winds its way through the system.

2. You Are Guaranteed to Get Something

Not everyone who applies for workers’ compensation benefits is approved. It’s possible you are denied initially and then lose your appeals. That would mean no benefits—no medical care benefits and no indemnity benefits. Nothing—even if you are badly hurt.

By settling, you guarantee that you receive something. That might be attractive if the evidence is weak that you were injured on the job.

3. You Control How to Spend Your Settlement

It’s up to you to decide how to spend your settlement. Without a settlement you would have to wait for a monthly indemnity check. When you receive a lump sum, you can decide what you want to do with it.

Some people start a small business or clear out other debts. Some go back to school so they can start a new career, and their settlement will help cover their living expenses. It’s up to you. Many people benefit from the freedom a settlement provides.

4. You Can Invest Your Settlement

You might put your settlement into stocks or mutual funds and watch it grow much faster than if you simply received a monthly check. Investment comes with risks, however. It’s also possible for the market to tank.

5. Family Members Can Inherit Your Settlement Proceeds

Let’s say you don’t settle but instead opt for a monthly payment. In that case, the payments end when you die, which means your family won’t receive anything. If you get a lump sum payment, on the other hand, then you can leave any remaining amount to whoever you want. It provides some sort of legacy for your loved ones.

Disadvantages to Settling a Workers’ Compensation Claim

There are definite downsides to settlement, which is why it isn’t always the best choice for an injured worker. Below, we look at a few of the disadvantages.

1. You Might Not Get Enough in the Settlement

With a full and final settlement, you give up the right to reopen your case in the future and request more compensation. That could make a big difference, depending on your injuries. Some people watch their condition worsen dramatically, which requires more medical care than they expected.

For example, you could have suffered a devastating spinal cord injury. Many people need ongoing surgeries in the years ahead. You need to make sure your settlement is big enough to cover future medical expenses. If you don’t, then you might not have enough money to pay for this care.

Please work closely with an experienced Arizona workers’ compensation lawyer. We have ample experience helping our clients understand their likely future expenses.

2. Settlement Negotiations Take Time

Settlement doesn’t happen automatically. Instead, insurers usually try to get injured workers to accept a low amount. That protects the insurance company’s profits.

Typically, we engage in multiple rounds of negotiation to get the insurance company to increase what they are willing to pay. But that takes time—up to 18 months, in some cases. If you are badly hurt, you might want to start receiving payments in a monthly fashion.

You should have a lawyer negotiate on your behalf. Few people can accurately calculate how much medical care they will likely need or estimate their living expenses.

3. You Might Blow Through the Settlement

If you get a lump sum, you might spend it very rapidly. That will deplete the funds you might need to pay ongoing medical care and living expenses. That is a real risk, especially if you are not good at handling money.

Not All Settlements Are the Same

Please keep the following questions in mind whenever reviewing a settlement offer for a workers’ compensation claim:

• Does it include vocational rehabilitation benefits? These benefits can help you train for a new career. Vocational benefits can represent quite a bit of money, so ensure they are included if you want them.
• Does the settlement include enough for your expected future medical care?
• What is your prognosis and the likelihood you can get back to work? If the prognosis isn’t good, then you might be permanently disabled and unable to work again.
• Have you worked with an experienced lawyer to hammer out a settlement? As mentioned above, insurers might try to offer too little.

Call Snow, Carpio & Weekley to Discuss Whether Settlement is Right for You

Our Arizona workers’ compensation attorneys are standing by to help in any way we can. We’ve negotiated many settlements for clients and only want what’s best for you.