5 Myths about Personal Injury Settlements – Dispelled


The legal world isn’t exactly easy to understand. Like medicine, it takes extra schooling and extra tests to get certified.

The depth of extra knowledge needed to understand injury settlements confounds people. This is one reason that police procedurals and medical dramas are so prevalent, people love to peer into these areas.

Injury Settlements Myths

Like most myths, these are products of wishful thinking or a lack of looking at things closely. It’s easy to assume information and move on, after all, you only have so much time and energy.

Remember, the spread of misinformation hurts many and helps few.

1Small Injuries? No Case

The size of the injury doesn’t matter. What matters is that elements in the system are held accountable.

Small claims and minor injuries stack up to hold insurance agencies accountable. The very fact that these cases cost more to litigate than to simply let go works in the favor of the insurance company.

Taking them to court and making them lose with penalties on top drives home the point that business needs to play fair.

2They’re Tax-Free

This is a partially true and partially not so much statement.

The awards component of a settlement is not taxed. However, the wage compensation part is. Essentially, if you would have paid taxes on the money, you still do.

For a detailed breakdown read more on taxes and injury settlements and contact an accountant.

3Insurance Covers Injuries

Ideally, it should. In reality, insurance agents are incentivized by insurance companies to offer less than what it cost to cover an injury. They also will, as a matter of business, find any reason to avoid covering costs.

Insurance also commonly fails to account for non-material losses. Injury lawsuits work to make up these differences.

4Cases Take Years

Some cases do take years to go through. These are often in the class-action category and the number of people involved stretches out the timeline. In other instances, subtle injuries take time to discover and verify.

Even so, by years it actually means two. And those are the exceptions. Most personal injury cases are resolved before they even make it to trial.

5Out of Pocket Costs

This strikes both ways: the party suing and the party getting sued.

You don’t know if you’ll have the funds to pursue a case. This is resolved by lawyers working on contingency and offerings of lawsuit settlement loans.

The party getting sued rarely pays their costs out of pocket. Instead, these costs are covered by the defendant’s insurance.

The courts don’t intend for you to be ruined or do any ruining to seek just compensation and a fair verdict. They are imperfect and things happen but are far rarer than anecdotes suggest.

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The persistence of injury settlement myths comes down to exaggerations of one-offs as being the most typical result.

Always check up on information from multiple sources to stay informed and keep an eye on the world.


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