Most people have heard about settlement of case. Ads by attorneys on television often talk about person injury and workers compensation settlements.
Those ads usually do not tell you a whole lot. They do not talk to you about what a settlement is. They also do not discuss why insurance companies settle cases.
To understand why insurance companies settle cases, you first need to understand what a workers compensation settlement is. Basically, a settlement is an agreement between you and the insurance company. In that agreement, you give up your workers compensation case and the insurance company buys it from you for a certain amount of money.
Under Georgia workers compensation law, a settlement is about the only way to get a lump sum payment of benefits. It’s different than a personal injury case. In a personal injury case, you can go to court and get a decision from a jury or a judge about entire value of your case.
Georgia workers compensation does not have the ability to get a lump sum verdict. You can go to workers compensation court, but the judge does not award you a settlement.here is no lump sum verdict otherwise.
Why would insurance companies be interested in settling workers compensation cases?
Remember that most insurance companies are for profit businesses. They are in business to make money.
In a workers compensation case, they make money by taking insurance premiums from employers. When someone gets hurt on the job, the insurance company has to pay out workers compensation benefits.
They want to pay as little as possible. The less they pay, the more money the company makes.
What does settlement have to do with how insurance companies operate for profit?
Insurance companies try to predict what cases are going to cost. That is how they try to decide what to charge you for a particular type of insurance policy. They are in the business of managing risks.
In workers compensation cases, insurance companies try to predict what an injury will cost them. They look at the cost of medical treatment. They also looks at the temporary total disability benefits and permanent partial disability benefits you will receive. Based on that, the insurance company comes up with an estimate of what your case is going to cost them in the future.
Once they know what your case likely will cost them in the future, they can make a decision about what they should pay to “buy” your case. They want to make a good business decision. They will try to settle your case for less than it probably would cost them if they left your case open.
Why is it important to know why insurance companies settle cases?
You do not have to settle your case. But, you way want to explore settlement. Knowing how the insurance company evaluates cases will help you avoid settling your case for too little.
You probably will want to consider evaluating the case the same way that the insurance company does. This is how I evaluate workers compensation cases for the clients I represent. Insurance companies pay money in settlement when they believe that your case will cost them a lot in the future.
What insurance companies will usually pay money for is if they see that your case is going to cost them a lot of money in the future. That means they are going to have to pay a lot of workers compensation benefits.
Before figuring out a settlement amount, consider your other alternative. You could just leave your case open. If you consider what would happen and what benefits you would receive if you made that choice, I believe you can make a better decision about settlement.
What if I have other questions about settlement?
You need to make a good decision about settlement. It is a very complex topic. This article I wrote about settlement discusses the settlement process in more detail.
Before discussing a settlement amount with the insurance company, I recommend that you have a free consultation with an attorney who specializes in Georgia workers compensation. Having an attorney on your side who knows this area of the law likely will help you get a good result. If you would like to set up a free consultation with me, I am happy to do that.
Setting up a free consultation is easy. Just call our office at (770) 214-8885 or complete and submit the form on this page to request a consultation.
Jason Perkins is an attorney who specializes in representing injured workers. He regularly blogs about Georgia’s workers’ compensation system and issues that are important to injured workers and their families.
You can subscribe to his Georgia Workers Compensation channel on YouTube.