Settlement Process Explained

Settlement typically begins after the demand letter is sent. The insurer reviews the file and responds — sometimes within a few weeks, sometimes months later. A first offer is almost always below what the adjuster is actually authorized to pay. Counter-offers from the injured person are normal and expected.

Adjusters work from an internal valuation built on several inputs: the medical bills, the severity and type of injury, the clarity of fault, prior verdicts in similar cases, the perceived likeability of the injured person as a witness, and the policy limits. Good documentation increases the value; gaps in treatment, inconsistent statements, and aggressive social media activity reduce it.

When both sides agree on a number, the insurer issues a release — a written document saying the injured person gives up the right to sue over this incident in exchange for the agreed amount. The release is typically several pages. It almost always includes a full release of the defendant and sometimes other related parties. Read it carefully, or have someone review it, before signing.

The check does not arrive the same day. Common timing is 2 to 6 weeks after the release is signed. Before the injured person is paid, several things typically come out:

• Attorney's fee, if represented — usually a percentage under a contingency agreement
• Case expenses — filing fees, records costs, expert reports
• Medical liens — health insurers, Medicare, Medicaid, and treating providers may have a right to be paid back
• Any outstanding bills the injured person agreed the attorney would resolve from the settlement

Before signing a release, the injured person usually wants to know: the total gross number, the expected net after all deductions, which specific claims are being released, whether any related claim (like a workers' comp or a property damage claim) is handled separately, and whether Medicare / Medicaid reimbursement is resolved. These details change what the settlement actually delivers.