If you have been injured due to someone else’s negligence, you may have heard that most personal injury cases settle before trial. But what does that process actually look like? Understanding how settlements work in California can help you make informed decisions at every stage of your claim and avoid common mistakes that reduce what you ultimately recover.
What Is a Personal Injury Settlement?
A settlement is a legally binding agreement between an injured party and the at-fault party — or more commonly, their insurance company — in which the injured person agrees to accept a specified sum of money in exchange for releasing all future claims related to the accident.
Once a settlement is signed, it is final. You cannot go back and seek additional compensation if your injuries worsen or new medical issues emerge. This is why it is critical not to settle until the full picture of your injuries and losses is clear.
How Does the Settlement Process Begin?
The process typically begins after you have received enough medical treatment to understand the true scope of your injuries. Settling too early — before reaching what is known as maximum medical improvement — risks undervaluing your claim.
Once your attorney has a complete picture of your medical treatment, lost income, and other losses, they will prepare and send a demand letter to the at-fault party’s insurer. This document outlines the facts of the accident, the injuries sustained, the treatment received, and the total compensation being requested. Supporting documentation — medical records, bills, pay stubs, and expert opinions — accompanies the demand.
What Happens After the Demand Is Sent?
The insurance company will review the demand and respond with a counteroffer, which is almost always lower than what was requested. This begins the negotiation phase. Your attorney evaluates each offer against the full value of your claim and advises you on whether to accept, counter, or prepare for litigation.
Pilavjian Law negotiates from a position of strength, using documented evidence and a demonstrated willingness to take cases to trial when insurers fail to offer fair compensation. Insurers are aware of which attorneys litigate and which do not — that reputation directly affects settlement outcomes.
How Long Does a Settlement Take?
There is no universal timeline. Straightforward cases with clear liability and well-documented injuries may settle within a few months. Complex cases involving severe injuries, disputed fault, or multiple liable parties can take a year or longer. Cases that cannot be resolved through negotiation proceed to litigation, which extends the timeline further but is sometimes necessary to achieve a fair result.
What Happens When a Settlement Is Reached?
Once both sides agree on a number, you will be asked to sign a release of claims. This document formally ends your right to pursue further compensation related to the accident. After signing, the insurer issues a check — typically within a few weeks — made out to you and your attorney.
Your attorney’s contingency fee, along with any case expenses advanced on your behalf, is deducted from the settlement proceeds. Medical liens — amounts owed to health insurers or providers who treated you — are also resolved at this stage. Your attorney negotiates these liens to maximize what you actually take home.
Do I Have to Accept a Settlement?
No. You are never obligated to accept any offer. If negotiations do not produce a fair result, your attorney can file a lawsuit and pursue the case through litigation, including trial if necessary. The decision to settle or proceed is always yours, made with the guidance of your legal team.
If you have questions about where your case stands or what it may be worth, Pilavjian Law offers free consultations with no obligation. Call (818) 380-3021 to get answers specific to your situation.