The pros and cons of settling your workers comp case!
If you’re injured and receiving workers compensation benefits, it can be tempting to settle your case with the insurance company for a lump sum payment of tax-free cash.
But is it a good idea to settle your case? What are the advantages of doing so? And are there any reasons why you SHOULDN’T settle? We’re going to answer these questions right now!
My name is Rex Zachofsky and I became a New York workers compensation lawyer 17 years ago after getting injured on the job. If you’re looking for a lawyer to help you with your claim with New York Workers Compensation Benefits, please give me a call at 212-406-8989 to schedule a free consultation.
So what are some of the reasons why you might consider settling your workers compensation case?
Probably the biggest pro is the fact that you get to bargain for a known outcome. If you were to go to trial, there’s a chance you could get more, but there’s also a chance you could get less… and there’s always the chance that you could get nothing.
Settling, on the other hand, gets you a definite amount that you can agree to, eliminating the risk of going to trial and guaranteeing that you receive compensation for your case.
Another big pro for settling your case is the fact that you’ll receive a lump sum payment from the insurance company that is yours to do with as you see fit. While generally speaking, workers compensation benefits end when you’re medically cleared to return to work, a settlement is yours to keep forever.
This can relieve any financial pressure you might be experiencing and provide you and your family with a safety net. A lump sum settlement can also pay you for benefits that you never end up using.
For instance, if you're entitled to benefits for prolonged period of lost time or permanent partial disability, you would lose out on money if you went back to work early.
But if you negotiated a settlement based on that same period of projected lost time and settle your case, you can go back to work whenever you want and still keep that money.
Generally speaking, settlements are also quicker than taking your case to trial. Since everyone is in agreement, the only holdup is doing paperwork, getting the board to approve it, and having a judge sign off.
This can typically take a matter of weeks to maybe a few months to complete, which may be considerably shorter than going through a lengthy trial process. nd once it is complete you finally have closure and can move on with your life, putting the case behind you.
Another big pro that most injured workers are unaware of is the flexibility that a settlement provides.
Sometimes insurance companies might not want to formally accept a particular claim because of the precedent it sets, or they might want to avoid accepting liability for an accident because it looks bad on their books. A settlement allows them to avoid these liabilities while paying you additional compensation as a quid pro quo.
For example, we had a case years ago where a client had a heart attack. And we were claiming that it was a work-related heart attack. The insurance company wanted to avoid accepting the case because they feared opening the floodgates to every heart attack victim who might claim that their heart attack was work related.
So the insurance company reached out to us and said “Hey, we're not formally accepting this claim, but we will pay you for it, as long as you understand we are not going to accept it.” We discussed it with a client. We signed the paperwork and ended up getting him a very significant settlement
Another big pro for settling your case sooner rather than later is the present value of money.
This is something that is very evident right now. A dollar today is worth more than a dollar tomorrow. And with the current rate of inflation, money you get down the road is not as valuable as money you get today.
The sooner you settle your case and maximize the overall value of your claim, the more it will be worth to you.
A dollar invested today and grown in the future is worth more than a dollar earned years from now.
Settling your case isn’t all upside though, so what are some of the cons of deciding to settle?
The biggest one is that you might not get the full value of your claim.
People will come to me and say “I have a permanent partial disability at a 50% rate, and I'm entitled to $300 a w eek for the next 300 weeks. I want all that money right now.” Well, you're not going to get it all right now. If you want a lump sum of money, in most cases the insurance company is only going to give you a percentage of what they owe you. It often will be a large percentage—usually more than 50%—But you don't get all that money now. Sorry, it's the cost of doing business, my friends.
Another negative is the very real possibility of getting a lowball offer from the insurance company.
Insurance companies know that most people would rather avoid a risky court trial, so they often provide lowball offers hoping that you will accept them out of fear or impatience. They’re banking on the fact that you’re ready to get things over with and will likely accept whatever offer they throw at you.
It’s also important to keep in mind that when you settle your case, you are waiving your future rights to request benefits, usually both medical and financial, for that accident and injury. That means you could find yourself with medical expenses that you have to cover out of pocket from your settlement later on down the road.
It’s not uncommon for people receiving a lump sum of money to spend it right away and then be left without weekly payments to help offset lower wages due to their ongoing disability. But with some proper planning ahead of time, you can find ways to invest your money and make it work for you.
If you decide to settle your case, it’s often a full and final closure.
Once you accept a lump sum settlement, it is typically impossible to reopen your case or receive any further compensation for that injury.
There are specific types of settlements that don’t close out your entire case, such as an indemnity-only Section 32 agreement that only closes the financial portion while leaving the medical open, but generally speaking once your case is settled it’s closed forever.
If you want to learn more about different types of settlements, be sure to watch my other videos on settlements and Section 32 agreements.
Another possible negative is the fact that you need to have decent negotiation skills if you want to settle your case for what it’s worth.
The insurance companies have skilled adjusters and attorneys who negotiate settlements every single day.
It’s common to go through several rounds of negotiations before reaching an agreement, and if you’re going up against an insurance company that negotiates these deals every single day, you’re probably going to be leaving money on the table.
That's one of the prime reasons for having a worker's compensation attorney on your side, because they negotiate these agreements as often as the insurance companies and know how to get you more money than if you tried to go it alone.
Now that you know all the pros and cons, the big question remains: Should you settle your case?
I’ll share with you what I tell all my clients: If you need significant medical treatment or surgery, then I don’t recommend you settle your case and take that burden on yourself… but that’s not to say my clients haven’t done it!
Settling your case is a very personal thing that depends on the type of person you are and the situation you’re in. Everybody's different and you need to decide what is best for you.
Do you think you might need more treatment further down the road? Do you urgently need the money now? Does the thought of taking your case to trial stress you out?
The answers to these questions will not be the same for everyone, so it’s important you make the decision for yourself when the time comes.
If you DO decide to settle your case, the chances of getting paid what your case is worth are slim without an experienced workers compensation on your side. So if you or a loved one have been injured on the job here in New York and would like to set up a free consultation with an experienced lawyer who will fight for what you deserve, give me a call at 212-406-8989 today.
Talking to a lawyer costs you nothing, and is an opportunity to speak with someone knowledgeable who can answer your questions and point you in the right direction.
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