How is a settlement for a personal injury calculated?

UPDATED: Oct 10, 2014

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How is a settlement for a personal injury calculated?

I slipped on an wet sidewalk at a business. It was not marked and they accept liability. I have under gone 2 surgeries and 2 seperate stays in the hospital. In a settlement when they say 3 times medical bills, does that mean they pay my medical bills and pay me 3 times that amount? Also, do I pay taxes on the settlement?

Asked on October 10, 2014 under Personal Injury, Missouri


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Generally, if the settlement said you'd receive "three times medical bills," you get a total of an amount equal to three times the bills--not three times the bills plus having the bills paid as well. However, you need to reference the precise language of the settlement agreement, since settlements are contracts: the parties can agree to essentially anything they want to agree to, and whatever they do agree to in writing will be the settlement.

As to taxes: generally, the personal injury award is not taxable, but if there punitive damages, those would taxable, and any interest on the award is taxable.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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