Personal Injury Settlement Breakdown: How Much Goes in My Pocket?

You’ve probably seen the headlines before: “John Doe Wins $10,000,000 in Truck Accident Claim.” But how much of that $10 million actually went into John Doe’s bank account? Below is an explanation of how things really work. The process includes some flexibility – you might arrange for installment payments in certain cases, for example.

What Are the Components of a Pennsylvania Personal Injury Claim?

The typical personal injury claim includes compensation demands for:

  • Medical expenses, including estimated future medical expenses;
  • Lost earnings, including estimated lost future earnings;
  • Out-of-pocket expenses such as child care and housekeeping;
  • Physical pain and suffering; and
  • Other intangible losses such as mental anguish, disfigurement, etc.

Wrongful death claims include a different set of damages than personal injury claims, as do  workers’ compensation claims.

How Much to Ask For

Before you demand compensation for a personal injury claim, talk to a lawyer to find out how much your claim is really worth. Demand that much or, perhaps, significantly more to give yourself some bargaining room. Following is a list of some components that might decrease the net amount you receive.

Medical Liens

Your healthcare provider might place a lien on your future settlement and insurance proceeds. The purpose is to provide them with some collateral in case you cannot afford to pay your medical bills. Your lawyer can help you set up this arrangement, and you will pay it once the opposing party pays the settlement. 

Insurance Policy Limits

Every insurance policy has a coverage limit (the maximum amount they will pay under any circumstances). The auto insurance system in Pennsylvania requires you to carry $5,000 worth of no-fault coverage but also requires you to purchase a minimum amount of liability (at-fault) coverage. If your claim exceeds this amount, there is no way that the insurance company alone will fully satisfy your claim. Other options may be available, however. In a car accident, for example, you might come after the defendant’s personal assets.

Pennsylvania’s Comparative Negligence System

If more than one party is responsible for an accident, Pennsylvania applies its comparative negligence system. It will divide liability in precise proportion to the court’s determination of each party’s percentage of fault. If you are 30 percent at fault, for example, you will pay 30 percent of your own damages, and the opposing party will pay 70%. Anyone with a percentage of fault that exceeds 50% will receive no damages at all. 


In most cases, it takes more than just legal fees to pursue your claim. Following is a list of some  (but not all) possible costs.

  • Court costs (filing fees, etc.);
  • Investigation expenses;
  • Expert witness fees;
  • Medical records; and 
  • Postage.

Many lawyers will not charge you for these amounts unless they win your claim.

Most personal injury lawyers charge based on the contingency fee. A contingency fee is a pre-agreed percentage of the amount your lawyer wins for you, either in court or at the negotiating table. Most personal injury lawyers will charge you between 33% and 40% of your total compensation, depending on a number of factors. One consequence of this arrangement is that if your lawyer doesn’t win any money from the opposing party, your legal fees are zero.


Generally, a personal injury settlement is tax-free, with two exceptions:

  • Punitive damages. You probably won’t receive punitive damages even if you win your claim. If you do, however, they are always taxable. 
  • Interest on your judgment. Pennsylvania starts adding interest to your award from the date of the verdict. The interest (not the principal) is taxable.

If you receive a settlement with a taxable component, have your lawyer ask the court to separate its award into compensatory damages, punitive damages, and interest. That ensures that you can prove to the IRS which portion of your award is taxable, so they won’t tax all of it.

How Does the Money Get From the Opposing Party’s Pocket Into Yours?

Insurance companies pay the bulk of most personal injury claims. In most cases, the insurance company will transfer the money directly from its account to your lawyer’s professional account. Your lawyer will then deduct any deductible accounts, including their fee, and send the remainder directly to your bank account. 

Should You Hire a Lawyer?

If your claim is worth $500, maybe not. Even then, you should seek a free consultation, just in case your claim is worth more than you think. If your claim is worth $500,000, you probably need a lawyer. Between those two extremes, it’s a judgment call.

If you’ve been injured in a personal injury, please contact Marzzacco Niven & Associates at the nearest location to schedule a free consultation today:

Harrisburg Law Office
945 East Park Drive, Suite 103 Harrisburg, PA 17111
(717) 231-1640

York Law Office
2550 Kingston Road, Suite 210A York, PA 17401
(717) 995-8998

Wyomissing Law Office
833 N. Park Road, Suite 103, Room A Wyomissing, PA 19610
(717) 388-2325

Chambersburg Law Office
79 St. Paul Drive, Suite 1 Chambersburg, PA 17201
(717) 388-2378

Carlisle Law Office
354 Alexander Springs Road Carlisle, PA 17015
(717) 995-8732

Carbondale Law Office
30 Lincoln Avenue, Suite 101 Carbondale, PA 18407
(717) 995-8810

Lancaster Law Office
2173 Embassy Drive, Ste 123, Lancaster Pa 17603
(717) 616-2954

Lebanon Law Office
937 Willow Street, Suite D Lebanon, PA 17042-1140
(717) 995-8963