A car wreck settlement can provide much needed funds to pay your mortgage, household bills and medical expenses after an auto accident. Some accidents are minor and rarely result in serious injury—the proverbial “fender benders.” But if you are involved in a serious accident through no fault of your own and are gravely injured, the financial consequences can be severe. You may be unable to work for several months and your health insurance may not cover all your medical costs. A car wreck settlement can be a lifesaver in this scenario, but before diving into the process, there are a few things to consider.
Frequently Asked Questions about Car Accident Insurance Settlements
There are many questions that may race through your mind during the long process of an insurance claim. If you have problems with your claim and need specific questions answered, then don’t hesitate to call your insurance company. Don’t be afraid to read off a list of questions from a notebook if necessary. Make sure that all your questions are answered before you proceed with making a claim or accepting an offer. Here are a few of the most common questions.
What is an insurance settlement? An insurance settlement is essentially a payout of monies owed to either the insured party covered by the insurance company or to a party injured by the insured. In the case of personal injury to another party, the insurance company will contact that person’s healthcare provider to determine the extent of the injury and the amount of the settlement. As per the terms of an insurance contract, if the insured has their costs of personal injury covered in the event of an accident, the insurance company will pay out up to the limit after the deductible has been met.
What am I entitled to? This is the biggest question that almost every claimant asks. The answer, of course, rests with the company itself, but there are ways in which you can work out the amount you are entitled to using an accident damage calculator. This is a mathematical formula that takes the injuries suffered (if any) and the damage to the car, deducts points for driver error, poor condition of the car and other factors that may reduce the amount, and then assesses the amount of time you will need to recover.
How long will it take? This will depend upon the type of claim that you are making. If it is a straightforward accident that was not your fault, it should be processed quickly—sometimes as short as two weeks. Other claims, such as when the other party is not insured or drove off without leaving insurance details, might take longer. Claims in which you were partially or totally responsible might take even longer—perhaps as long as 3 months.
What if the car is stolen or written off? If the damage to your car was due to theft, then you may have to cover any repairs yourself while the insurance company determines how much it’s responsible for. If the car is written off, the claim might take more than a month, but you should be able to get a rental car while you are waiting for compensation.
Will I have to pay anything? You will have to pay for any costs that are higher than the maximum coverage amount of your insurance policy. Your policy will have stated this at the outset, so you should be aware of this cap. You can avoid paying out of pocket by claiming from the other party’s insurance, or by taking the car to a recommended garage for repairs. Medical bills will have to be covered by you or by the other party’s insurance company.
Are bodily injury insurance settlements taxable? As a rule, you will find that taxes do not apply to these settlements if bodily injury is involved. There is only one special case where IRS may consider a settlement as taxable, and that is if the settlement not only fixes the vehicle but also improves its value. At that time, the IRS may consider it taxable because the value of something you own increases. Even then, the IRS usually doesn’t get involved, so for all intents and purposes, car insurance settlements, whether bodily or property, are usually not taxed.
Want a favorable car wreck settlement? Call The Pinkerton Law Firm today! 713-360-6722