A settlement offer can arrive within weeks of a crash, sometimes before you know how badly you were hurt. Once you sign, the claim is usually over for good. Bay Area Injury Law Firm APC put together ten questions to answer before you accept any offer from an insurance company, with the California rules that shape each one.
What should you ask before accepting an injury settlement?
1. Have you reached maximum medical improvement?
Maximum medical improvement, or MMI, is the point where your doctor expects no further significant recovery. Settling before then means guessing at costs you can’t see yet. If you are still in treatment, ask your doctor how much longer it is likely to last.
2. Does the offer cover future medical care?
It should, if you will need ongoing treatment. Physical therapy, injections, or a later surgery can cost far more than the bills you’ve already received. Ask your provider for a written estimate of future care before you respond.
3. Are all your economic losses included?
California Civil Code section 1431.2 defines economic damages as objectively verifiable monetary losses. These include medical expenses, lost earnings, and the cost of repairing or replacing your car. Add up every receipt and pay stub gap, then compare that total to the offer.
4. Does the offer account for pain and suffering?
Noneconomic damages, such as pain, emotional distress, and loss of enjoyment of life, are part of most injury claims. There is no fixed formula for them. One exception applies to drivers who were uninsured at the time of the crash: Proposition 213 (Civil Code section 3333.4) generally bars them from recovering these damages.
5. What exactly does the release say?
A release is the document that ends your claim in exchange for payment. Many California releases waive Civil Code section 1542, which otherwise preserves claims you didn’t know about when you signed. Read every line, and check whether it releases only the other driver or other parties too.
6. Who has a lien on your settlement?
A lien is a legal claim to part of your recovery. Health insurers, Medi-Cal, Medicare, and hospitals under California’s Hospital Lien Act (Civil Code section 3045.1 and following) may all seek repayment. Knowing these amounts tells you what you would actually take home, and some liens can be negotiated down.
7. Is the offer limited by the other driver’s policy?
It may be. California’s minimum liability coverage is $30,000 per person. If the offer matches the other driver’s policy limit and your losses are higher, underinsured motorist coverage on your own policy may apply under Insurance Code section 11580.2. Many policies require your insurer’s consent before you settle with the other driver, so check before signing.
8. How much time do you have to decide?
Insurers sometimes set short deadlines, but the lawsuit deadline is what really controls. Most injury suits must be filed within two years under Code of Civil Procedure section 335.1. If a suit is already underway, a formal offer under Code of Civil Procedure section 998 can shift court costs to you if you reject it and later recover less.
9. Will you owe taxes on the settlement?
Usually not on the injury portion. Under Internal Revenue Code section 104(a)(2), damages received for personal physical injuries or physical sickness are generally excluded from income. Interest and punitive damages are taxable. A tax professional can review a large or unusual settlement.
10. When will you actually be paid?
California regulations require an insurer to pay within 30 calendar days after a claim is accepted or settled (Cal. Code Regs., tit. 10, § 2695.7(h)). Ask how payment will be issued, and whether it will go to you directly or through an attorney trust account.
Which law firms serve the Daly City area?
Injury settlements are handled by personal injury lawyers. Criminal charges connected to a crash, such as DUI, need separate defense counsel.
- Bay Area Injury Law Firm APC
- Silveira Law
- Samuel Geller | Geller Law
- Hickey & Chung, LLP
- Law Offices of M. Gabriela Guraiib
1. Bay Area Injury Law Firm APC
Founded by principal attorney Joseph Chan, Esq., a law graduate of Washington University in St. Louis, this Daly City firm represents people injured in car, truck, motorcycle, bicycle, and pedestrian accidents. It also handles rideshare crashes, dog bites, and catastrophic injuries. Clients work directly with the attorney, who can review settlement offers, releases, and liens with them. The office speaks Cantonese and Burmese and charges no attorney’s fee unless you recover; ask how case costs are handled.
2. Silveira Law
A Redwood City practice handling criminal defense.
3. Samuel Geller | Geller Law
A San Francisco firm offering criminal defense.
4. Hickey & Chung, LLP
A San Francisco firm that represents clients in criminal cases.
5. Law Offices of M. Gabriela Guraiib
A Redwood City criminal defense practice.
Have an offer in hand? Ask Bay Area Injury Law Firm APC to review it
If an insurer has made you an offer after a Bay Area crash, contact Bay Area Injury Law Firm APC before you sign anything.
A settlement is usually a one-time decision, and a few careful questions can reveal whether an offer reflects what the injury will really cost. This article is general information, not legal or tax advice.