In most workers’ compensation cases, there comes a point when both sides discuss settlement. But how is the value of a workers’ compensation settlement determined in North Carolina? Understanding the key factors that influence settlements can help injured workers navigate their claims effectively. Here are four critical points to keep in mind.
1. You Are Not Required to Settle
Neither you nor the insurance company is obligated to settle. If an agreement cannot be reached, no judge or jury will determine the value of your case. Unlike personal injury lawsuits, where courts award damages, workers’ comp cases continue under state laws governing benefits until a resolution is reached or the case progresses naturally.
2. Workers’ Compensation Does Not Cover Pain and Suffering
A common misconception is that workers’ compensation provides damages for pain and suffering—this is not the case. Workers’ comp only covers specific financial losses, such as medical expenses and lost wages. Understanding this distinction can help set realistic expectations when considering a settlement.
3. Settlement Value is Based on Two Key Factors
Insurance companies determine settlement value based on potential future expenses if a settlement is not reached. These factors include:
Medical Compensation
This covers future medical costs related to your work injury, such as:
- Doctor visits
- Medications
- Physical therapy
- Diagnostic tests
- Future surgeries (e.g., hardware removal from a prior procedure)
Disability Compensation
Disability compensation depends on either how your injury affects your ability to work or the amount of your permanent impairment rating. Factors include:
- Whether you can return to a job earning the same wages as before your injury. This type of disability is called temporary total disability (if you’re not earning any wages due to your injury) or temporary partial disability (if you’re earning less than before your accident due to your injury).
- Your permanent impairment rating, assigned by a doctor, reflecting the lasting effects of your injury. This is called permanent partial disability. This is based upon a certain number of weeks that are allocated to specific parts of the body under the law, e.g., 300 weeks for the back; 240 weeks for the arm; or 144 weeks for the foot. So, if you have a 10% permanent impairment to your back, it would be worth 30 weeks of benefits (10% of 300 weeks).
4. Your Earnings at the Time of Injury Impact Your Settlement
Your pre-injury wages significantly impact your settlement amount. Workers’ compensation benefits are calculated as a percentage of your earnings at the time of the accident (two-thirds of your average weekly pre-tax earnings). This means two workers with the same injury may receive different settlements if one had a higher income before getting hurt.
Conclusion: Consult an Experienced Workers’ Compensation Attorney
Workers’ compensation settlements are designed to help injured workers regain control of their medical care and financial future. Whether you plan to return to work, apply for Social Security Disability, or retire, a settlement can be a crucial step forward.
Every case is unique, so consulting a knowledgeable workers’ compensation attorney is essential. A legal professional can evaluate your situation and help determine a fair settlement range. Before making any decisions, seek legal guidance to ensure you understand your options and make an informed choice.