It is common for insurance companies to issue a settlement check within a few days of signing the agreement, though the actual duration until you receive the funds can extend up to a few weeks. Some factors like medical liens or other subrogation payments can delay payment.
What are some factors that can delay my personal injury settlement check?
You will usually receive your personal injury settlement payment within about 6 weeks of the at-fault party receiving your signed release. A release is where you accept the settlement offer in exchange for promising not to pursue or continue any legal action. (Often releases are notarized.)
However, there are some issues that can make it take longer for you to receive payment, such as:
- bank holidays and delays,
- insurance company policies or delays,
- medical liens, and
- subrogation payments to Medicare, Medicaid, or other programs that paid your health expenses or that have a legal right to a portion of the settlement.
If the victim was a minor or the case is a wrongful death claim, there will also be a delay for the judge to approve the settlement.1
Establishing an attorney-client relationship with a personal injury attorney and getting his or her legal advice can be the best way to maximize the portion of the settlement proceeds that make it to your bank account.
Insurance company delays
The insurance company may delay the settlement payment for several days. Depending on the insurance company, this can happen for a variety of reasons, including:
- the company only writes settlement checks on certain days of the week,
- the company only processes payments once a week or a few times per month,
- claims are processed in a department in one state, but checks are sent from a department that is based somewhere else, or
- extra levels of internal review are needed for large settlement payments over a certain threshold amount.2
Bank holidays and delays
Once the settlement payout is deposited in the trust account that your attorney has for your case, there can still be delays. These hold-ups can be due to:
- bank holidays, or
- the financial institution’s internal policies.
Many banks have internal policies that require extensive review of large payments. These reviews are meant to ensure that the check or payment is legitimate. During this time, the bank will put the payment on hold. Federal law requires the funds to be disbursed in a reasonable amount of time.3 However, there are numerous exceptions to this law that lets banks delay the disbursement of the money. While the bank’s review process is an important step to protect consumers from fraud, it is inconvenient for accident victims who are waiting for their settlement checks.
Note that it may take up to five days for a check to clear, and your bank’s funds availability policy may add an additional delay.
When the bank is closed for a holiday, the process of clearing the settlement check will pause. This can delay the disbursal of the money by a day or two.
The timing of the payment can lead to a delay, as well. If the insurance company sends the settlement check, but your accident attorney receives it late on a Friday, it can be impossible to deposit the funds in your account before the weekend. This can delay your receipt of the check for a few days.4
Liens and subrogation payments
Once the settlement check has been paid by the insurance company, cleared by the bank, and deposited in your trust or escrow account, deductions still have to be made to pay off liens and reimburse other payments.
Liens are claims against your settlement award. Other parties can get a lien against your personal injury settlement by providing services upfront without being paid for them. The compensation for the service comes in the form of a lien.
Medical liens are the most common in a personal injury case. A medical provider can treat your injuries without charging you. Instead, they treat you in exchange for a lien against your personal injury settlement. When your case settles and the bank has disbursed your settlement check, these liens for medical expenses have to be paid off before you can collect your award.
Your state’s personal injury law may allow other types of liens against your settlement, as well. A common example is a government lien for any unpaid child support.
Other parties may have subrogation rights against your award, as well. These are parties that have made payments on your behalf, usually for your healthcare. Common examples of parties or entities that can have subrogation rights against your personal injury settlement include:
- government-funded healthcare plans, like Medicare or Medicaid, that paid for medical treatment,
- workers’ compensation plans,
- Veteran’s Affairs coverage,
- Department of Human Services,
- car insurance companies, and
- other private health insurance companies.
For example: Tracy is involved in a car accident. Her motor vehicle is totaled. Her auto insurance company pays $10,000 to cover her property damage. When Tracy settles her personal injury claim against the at-fault driver for $150,000, her car insurance company demands subrogation for the $10,000 it paid.
These subrogation payments can surprise injury victims. They often expect to receive the whole settlement amount from their personal injury lawsuit. Without paying off these liens and satisfying subrogation claims, though, you would benefit from the services and coverage that you received, and would then keep the money that would have gone to pay for them. Paying liens and subrogation avoids this windfall. However, making the payments can delay the disbursement of your settlement money.
Getting skilled legal representation from an attorney at a local law office can be the best way to pay back legitimate creditors from your settlement while contesting other liens against your award.5
What payments get deducted?
Several different types of payments will get deducted from your settlement award before it can be disbursed. Some common deductions will be:
- outstanding medical bills,
- medical liens,
- payments to satisfy any subrogation rights,
- attorneys’ fees and other legal fees, like court costs, travel, copies, etc., and
- reimbursements if you took out an advance on your personal injury settlement.
These deductions have to get taken out, regardless of whether you accepted a settlement offer and signed a release form for a lump sum award or a structured settlement.
Making these payments can take several days or weeks. Once all the deductions have been made, the remainder will go to the victim to cover their medical bills, lost wages, pain and suffering, etc.
Note that it is rarely advisable for you to take out an advance on your personal injury settlement (“pre-settlement funding”). Borrowing rates are usually very high, and you can never be sure what your final settlement will be.6
What about settlement payments for child victims?
If the victim of the accident was underage, the settlement will often get delayed even longer. Many states require a judge to sign off on a settlement agreement when the victim was a minor. This extra hearing will happen soon after the settlement is reached between the minor’s parents or guardian and the representatives for the at-fault party. Only after the judge has found that the settlement is in the interests of the minor can the payment process begin. This can delay the settlement disbursement.7
Having a personal injury lawyer from a reputable law firm at this point in the legal action can speed up the process and ensure that the settlement is fair and that it gets approved.
Are wrongful death cases the same?
Wrongful death and survival action cases may also require a judge’s approval. The time it takes to schedule a hearing with the judge can delay the payment of the settlement funds.
Other parties may also have a say in the settlement amount or have a right to review it, including:
- the administrator of the decedent’s estate, and
- state or federal agencies that deal with inheritance taxes.
If any of these parties object to the settlement, it can prolong the settlement process.8
- See, for example, 231 Pa. Code § 229.1.
- See, for example, Reynolds v. American Hardway Mut. Ins. Co. (Idaho, 1988) .
- 12 CFR 229.
- See, for example, Bank Holidays, Nevada; Federal Holidays, OPM.gov.
- See, for example, DeHerrera v. Am. Family Mut. Ins. Co.
- See, for example, Chandler v. State Farm Mut. Auto. Ins. Co. (United States Court of Appeals for the Ninth Circuit, 2010) .
- See, for example, In re Wild (. )
- See also Brown v. Hackney (In re Estate of Brown) .