Settling your workers' compensation case is a big decision that shouldn't take lightly, and depending on what type of settlement you use, there could be no going back. So it's important that you understand the pros and cons of settling before committing to a course of action.
A settlement is basically an agreement to sort out some or all parts of a case. Some people think of it as a settlement when a judge makes a decision, and they get a lump sum for their injury. Other times, it’s about working out specific details of the case, like figuring out your average weekly wage or temporary benefits.
Most folks see a settlement as closing the whole case and getting one big payment. But keep in mind, “settlement” is a pretty broad term and can mean different things when it comes to your workers' compensation claim.
In workers' comp, there are two main types of settlements you should be aware of: Stipulations and Section 32 settlements.
Stipulations: Think of a stipulation like an official agreement on paper. It’s pretty flexible and can be used to settle specific parts of your case or even the whole thing. For example, you and the insurance company might agree on how serious your injury is or how much you should get in temporary benefits. Once you both sign the agreement and a judge approves it, it becomes official. The good thing about stipulations is that they can usually be reopened if your condition gets worse, so you have some wiggle room if things change down the road.
Section 32 Settlements: These are more of a “done deal” kind of settlement. A Section 32 settlement usually means you’re closing the entire case for good. Once you sign off on it, it’s really tough to reopen—unless both sides and the Workers’ Compensation Board agree, which doesn’t happen often. This type of settlement usually comes with a bigger payout because the insurance company is paying to wrap things up permanently. But in some cases—especially if you’re on Medicare or Social Security—the medical part of your case might stay open while the financial part gets settled. This is called an indemnity-only settlement.
Alright, now that we’ve got a handle on what a settlement is, let’s talk about the good stuff—what are the perks of settling your case?
Knowing What to Expect: One of the biggest upsides to settling is that you get to call the shots and know exactly what you're walking away with. Instead of leaving things up to a judge, you and the insurance company work out a deal that makes sense for you. Having that certainty can give you peace of mind and take away the stress of not knowing what might happen in court.
Getting Your Money Sooner: Settling often means you’ll get a lump sum payout, which can be a huge help if you’ve been struggling to cover bills while you're out of work. A big one-time payment can help you catch up on expenses, pay off debts, or even put some money away for the future.
Money in Your Pocket Now: A dollar today is worth more than a dollar tomorrow, thanks to inflation. Getting your settlement money now means you can use it right away—whether that’s paying for immediate needs or investing it to make it grow over time.
Saving Time and Hassle: Settling your case is usually way quicker than going through a long trial and possible appeals. Once you’ve reached an agreement, it’s often just a matter of weeks or a few months before you get your payment. That means you can move on with your life sooner instead of waiting around.
More Flexibility: Settlements aren’t one-size-fits-all. They can be tailored to fit your specific needs, and you and the insurance company can work out terms that make sense for both sides. As long as everything is fair and follows the rules, you’ve got a lot of options to make the deal work in your favor.
While settling your workers' comp case has its perks, it’s also important to know about the possible downsides. Here are some of the biggest ones to keep in mind:
You Might Not Get the Full Amount: When you settle, you’re often agreeing to take less than what your case might actually be worth. Insurance companies usually offer a lump sum that’s lower than what you could potentially get if you took your case to trial. They consider things like the present value of money and possible future costs, which can mean a smaller payout than you were expecting.
Lowball Offers Are Common: Insurance companies might hit you with a low offer at first, hoping you’ll take it if you’re feeling desperate or unsure of what your case is really worth. Getting a low offer can be frustrating, especially if you’re struggling financially, but it’s important not to jump at the first number they throw out. Negotiation is key.
Giving Up Future Benefits: Once you settle, you’re usually giving up your right to any future payments for your injury—both financial and medical. If your condition gets worse later on or you need more treatment, those costs might have to come out of your own pocket. This can be risky if you’re not sure what your health will look like down the road.
Negotiating Can Be Tough: If you don’t have a knowledgeable attorney by your side, negotiating a fair deal can be pretty challenging. Insurance companies have experienced pros working for them, and without someone in your corner who knows the ins and outs, you could end up with a deal that’s not in your best interest.
Medical Costs Can Add Up: Even if your settlement includes money for future medical care, there’s no guarantee it’ll be enough to cover everything you might need. Medical treatments can be expensive, and if complications come up, you could end up paying a lot more out of pocket than you planned for.
Here are some situations where settling your case might be the right move:
Not Sure How Your Case Will Turn Out: If your case is complicated or there's a good chance you might not win in court, settling can give you a guaranteed outcome. It’s a way to avoid the risk of walking away with nothing and can bring some much-needed peace of mind.
Ready to Move On: Sometimes, enough is enough. If you're over the constant hearings, medical appointments, and stress that comes with your case, settling can be a way to finally put it behind you and focus on what’s next in life.
Money's Tight: If you’re dealing with serious financial pressure—like overdue bills or even the risk of losing your home—settling can get you the cash you need right away. Even if it’s not the perfect timing, sometimes financial urgency makes settling the best option.
Getting Close to Permanent Disability: If you're at the point where your condition is about to be classified as permanent, it’s usually a good time to think about settling. By then, you’ve likely gone through most of the major treatments, and your condition is more predictable, making it easier to figure out what your case is worth.
Your Health Has Leveled Out: If your condition has stabilized and you’re not expecting any major medical treatments down the road, settling could make sense. At this point, both you and the insurance company have a clearer picture of what your case is really worth.
Here are some times when it might be smart to hold off on settling your case:
You're Still Going Through Major Treatments: If you’ve got big medical procedures coming up, like surgery or ongoing treatments, it’s usually better to wait. Settling too soon could leave you stuck with hefty medical bills that workers' comp would have covered if you'd waited.
You’re Not Sure What the Future Holds: If you’re unsure about how your injury will affect you in the long run, it’s a good idea to hold off. Some injuries take time to show their full impact, and settling too early might mean you won’t have coverage if things get worse down the road.
You'll Need Medical Equipment Later: If you expect to need things like a wheelchair, special bedding, or other assistive devices in the future, make sure those costs are covered before you settle. Otherwise, you might end up having to pay for them out of your own pocket.
You've Had or Are About to Have Surgery: If you’ve recently had surgery or have one scheduled soon, it’s usually best to wait. Surgery can bring unexpected complications and recovery costs that should be factored into your settlement.
Your Condition Is Still Changing: If your health isn’t stable yet, settling now could be risky. If things get worse, you might not get enough compensation to cover your future needs. It’s usually better to wait until you have a clearer picture of your condition.
Settling a workers' comp case can feel overwhelming, but with the right game plan, you can make smarter decisions. Here are some tips to help you get the best outcome:
Make It About You: No two workers' comp cases are exactly the same, and what works for someone else might not be the best fit for you. Think about your personal situation, your long-term health needs, and your financial goals before deciding to settle.
Get a Solid Medical Check-Up: Before you even think about settling, make sure you’ve had a thorough medical evaluation. You need to know the full impact of your injury and what kind of care you might need down the road to make sure your settlement covers everything.
Look Ahead to Future Costs: Don’t just focus on your current bills—think about what might come later, like ongoing treatments, medical equipment, or long-term care. A good settlement should help you avoid any surprise expenses in the future.
Take Your Time: It’s tempting to settle quickly, especially if you’re feeling financial pressure, but rushing can mean walking away with less than you deserve. Give yourself time to weigh your options, talk to your attorney, and make sure you're making the right call.
Be Ready to Negotiate: Insurance companies usually start low, hoping you’ll take the first offer. Don’t get discouraged—be prepared to push back and fight for what you’re really owed. A little patience and persistence can go a long way.
Get Expert Help: Having a skilled workers' comp attorney in your corner is a game-changer. They know the tricks insurance companies use and can help you get a fair deal without being taken advantage of. A good lawyer makes sure you’re not leaving money on the table.
This whole process can feel pretty overwhelming, but knowing your options and the right timing can really make a difference. If you’re feeling unsure about what to do next, don’t stress—you don’t have to figure it all out on your own.
Whether you’re wondering if it’s the right time to settle or you’re ready to start negotiating, I’ve got you covered. Just reach out to me, Rex Zachofsky, at 212-406-8989 anytime. Let’s chat about your situation and figure out the best way forward together.
.jpg)
.jpg)
