After decades of handling car accident cases throughout Chicago and Illinois, I can say one of the most common surprises for clients happens when they see the final settlement amount. People often expect a number in their head, but when the actual check arrives, it can be lower than expected.
I understand how frustrating that can feel. You have been through a crash, you have medical bills and stress, and you want to believe the settlement will fix everything. The reality is that several legal and financial factors affect what you take home after a case settles. My goal here is to explain what happens behind the scenes so you can see the process clearly.
If you want a deeper look at how accident claims work, visit our Chicago car accident lawyer guide.
What a Settlement Really Covers
A car accident settlement is meant to help you recover the costs and harm caused by the crash. That includes your medical expenses, lost income, pain, and other damages. However, the settlement amount you see in the news or on paper is not the same as what you actually receive.
There are three main layers to every settlement:
- The total amount that is agreed upon
- The deductions that must be paid out by law or agreement
- The remaining balance, which is your net recovery
Let us go through what those deductions look like and why they exist.
Medical Bills and Liens
Medical treatment costs are often the biggest part of an accident case. Hospitals, doctors, and other providers have a legal right to be paid for care that resulted from your injuries. If your treatment was covered by health insurance, Medicare, or Medicaid, those providers may place a lien on your case. That means when the settlement is finalized, a portion of it must go to repay them.
This does not mean you lose control over that money. In fact, part of my job is to negotiate those medical liens down as low as possible. When we successfully reduce those bills, the client keeps more of the recovery.
Attorney Fees and Case Costs
At Phillips Law Offices, we work on a contingency fee basis. That means you do not pay us unless we win. Our fee is a percentage of the total recovery, which we discuss clearly at the beginning of the case.
Out of that amount, we also cover case costs such as filing fees, expert reports, and records requests. When your case is done, we provide a full breakdown so you know exactly where every dollar went. This structure allows clients to pursue justice without paying anything out of pocket.
Comparative Fault in Illinois
Illinois law uses a comparative fault system. The jury or insurance company can assign a percentage of responsibility to each party involved in an accident.
If you are found partially at fault, your recovery is reduced by that percentage. For example, if your damages are worth $100,000 but you are found 20 percent responsible, your final recovery becomes $80,000. If your share of fault is greater than 50 percent, you cannot recover at all.
This rule can affect your final settlement amount, even when the other driver clearly made mistakes. You can learn more about how this works in our post on being found partially at fault in Illinois.
Insurance Policy Limits
Another important factor is the at-fault driver’s insurance coverage. In Illinois, the minimum required insurance is often not enough to cover serious injuries. Even if your case is worth much more, the insurer only has to pay up to the policy limit.
When this happens, we look for other ways to recover compensation, such as underinsured motorist coverage or other responsible parties. You can read more about this process in our uninsured and underinsured driver guide.
Case Complexity and Timeline
Every car accident case is unique. Some settle quickly because fault is clear and injuries are well documented. Others take longer because we need medical records, expert opinions, or to wait for full recovery.
Insurance companies often try to delay or pressure victims into early settlements. Our job is to protect you from that pressure and make sure the value reflects your true losses, not just what the insurance company wants to pay.
Taxes and Settlement Categories
Clients often ask if their settlement is taxable. In most cases, compensation for physical injuries is not taxed. However, parts of a settlement that include lost wages or punitive damages may be taxable.
We explain how your recovery is categorized so there are no surprises when tax season comes. In some cases, structured settlements can help manage funds safely over time.
How We Maximize What You Keep
Our work does not stop when we reach a settlement offer. We keep pushing to ensure our clients retain the largest possible share of their recovery. That includes:
- Negotiating medical and insurance liens
- Reviewing all case costs to keep them reasonable
- Identifying every potential source of coverage
- Ensuring fault is assigned fairly and accurately
- Advising on how to protect your settlement after payment
Every dollar matters, and we treat your case that way.
The Importance of Transparency
I believe in being honest about how settlements work. You deserve to know exactly what affects your final result. Not every case ends with a massive payout, but with the right representation, you can be confident that your recovery is fair, accurate, and handled with integrity.
If you were in a car accident and want to understand your settlement or potential claim better, my team is here to help.
Call (312) 346-4262
161 N Clark St, Suite 4925, Chicago, IL
Free Consultation | No Fee Unless You Win
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The post Understanding Your Car Accident Settlement: Why Clients Sometimes See Less Than Expected appeared first on Phillips Law Offices.