How Long Does It Take to Get a Settlement Check?

What Happens After You Settle Your Case?

Motorcycle accident cases can often be settled more quickly than most car accident cases and often for the entire insurance policy. But what happens after you settle your personal injury case, and what’s the procedure?

Read this article to see how long it takes for a personal injury case to settle.

We’ll use this motorcycle accident case as an example of what happens after your settlement.

Your motorcycle was struck by a car, and you have a scar on your forearm. Your lawyer calls advising that he negotiated with the insurance company and obtained a final settlement offer of $150,000.

You decide to accept the settlement offer, so now what?

You’ll Have to Sign a Personal Injury Release

The insurance company will require you to sign a release. The release permanently releases the owner and driver of the car, which means you can never (unless fraud was committed) seek any more money for your injuries from the owner and driver of the car.

The insurance company will send their release to your personal injury lawyer. Most lawyers use the insurance company release. We usually do not use the insurance company release, which we find to be oppressive.

We usually use our own release, which does not make you agree to oppressive terms. Our release also includes language so that the personal injury settlement is not subject to income tax. Read this article at the HURT911® research website for information about income tax on personal injury settlements.

What Happens After You Sign a Personal Injury Release?

After you sign the release, your lawyer will send the release to the insurance company and wait for the insurance company to send the settlement check.

We send the release to the insurance company by fax or email. We usually receive the settlement check within 4-10 days after sending it.

On rare occasions, an insurance company will delay sending the settlement check. We have various options to force them to send the settlement check.

The insurance company will only send a settlement check to your attorney. The settlement check will be a two-party check made payable to both you and your attorney.

How Long Can an Insurance Company Take to Send a Settlement Check?

Insurance companies usually send the settlement check within a day or two after receiving your signed release.

On rare occasions, an insurance company will delay sending the settlement check. We have various options to force them to send the settlement check if your case was settled without having to file a lawsuit.

If your case was settled after a lawsuit was started, New York State law C.P.L.R. § 5003-a requires that the insurance company send the settlement check within 21 days (including weekends) of the date of making a “tender,” the date the release and stipulation of discontinuance was personally delivered to the insurance company or mailed by certified mail.

The penalty for failure to make a timely payment is 9% interest plus court costs.

C.P.L.R. § 5003-a governs actions (cases in suit), so if a lawsuit has not been filed by the time a case is settled and the insurance company fails to make timely payment, it may be possible to start an action by the purchase of an index number and filing a motion.

Lawsuits Against New York City and Other Governments

The 21-day period applies to non-governmental defendants. If the defendant is a municipality such as New York City or any public corporation, it is allowed 90 days to pay the settlement. New York City will check for liens it may have against the settlement, and that can take a few months to complete.

Will I know When My Lawyer Receives the Settlement Check?

The insurance company will send you a letter telling you that the settlement check was sent to your lawyer.

11 NYCRR 1.1(1) (COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK) requires that if the settlement check is more than $5,000, the insurance company must send you a letter on the same day they send your settlement check, advising that they sent the settlement check to your attorney.

If you receive a letter from the insurance company advising that they sent the settlement check to your attorney, then your attorney will have received your settlement check within a day of you receiving the letter.

What Happens After the Settlement Check is Received?

After your attorney receives your settlement check, your attorney must deposit the settlement check into an escrow account called an I.O.L.A. account (Interest On Lawyer Accounts).

Since the settlement check is a two-party check payable to you and your attorney, your attorney cannot endorse your name and deposit the check unless you either endorse the back of the check or sign a power of attorney allowing your lawyer to endorse the settlement check for you. You may have signed a power of attorney at the same time you signed the release.

Your lawyer will then deposit the settlement check into the attorney’s escrow account. Because settlement checks are out-of-state checks for large amounts, it can take up to 10 days for the bank to clear your settlement check.

After your check clears, your lawyer will deduct legal fees and case expenses. In New York, the legal fee for a personal injury settlement is 1/3 of the gross settlement. Case expenses are then reimbursed to the attorney.

If there are any liens, such as Medicaid, doctor liens, health insurance liens, or pre-settlement cash advances, those will be negotiated for a reduction and paid. The lawyer will then issue a check to you for your net settlement.

To find out how much you will receive from your personal injury settlement after deducting legal fees, expenses, liens, and cash advances, use the free HURT911® Personal Injury Settlement Calculator.

We are usually able to issue the settlement check to our client in 5-7 business days after it is deposited in our I.O.L.A. escrow account.

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