Settling Your Workers' Compensation Case in Texas

How and when to settle your Texas workers’ comp case.

While there are many benefits to settling your workers’ compensation case, you will also likely be giving up significant rights. Because settlements are typically final, it’s wise to consult with a Texas workers’ comp lawyer before you sign any agreements. (To learn how much that might cost you, see our article on attorneys’ fees in Texas workers’ comp cases.)

What Is a Workers’ Compensation Settlement?

A settlement is a voluntary agreement between you and the insurance company to resolve a disputed workers’ comp case. Texas places some significant restrictions on workers’ comp settlements. First, a settlement can resolve all issues except for future medical care. So even if you agree to a settlement, your medical treatment will continue to be covered through workers’ comp.

Second, Texas does not allow lump sum settlements. There is a narrow exception to this rule for impairment income benefits. You can receive these benefits in a lump sum, but only if:

  • you have returned to work for at least three months, and
  • you are earning at least 80% of your pre-injury average weekly wage.

When Should I Settle?

It’s important to understand the full the extent of your injuries before you settle your claim. For that reason, Texas does not allow workers with permanent disability claims to settle before they have reached maximum medical improvement (MMI). MMI is when your doctor finds that your condition has stabilized and assesses whether you have a permanent disability. Before that point, the extent of your injuries—and therefore how much you are entitled to in benefits—will be unclear.

How Is a Settlement Approved?

All workers’ comp settlements must be filed with the Texas Division of Workers’ Compensation. The division will review the settlement paperwork to make sure the agreement complies with the workers’ comp laws and is in your best interests. The division will typically approve or reject the settlement within 16 days. If you don’t receive a response within that time frame, the settlement is considered to be approved.

You can withdraw from a settlement at any time prior to its approval. However, once a settlement is approved by the division, it is final and typically cannot be undone.

What Is a Good Settlement Amount?

The amount of the settlement varies widely based on the severity of your injury, your ability to work, and your pre-injury wages. Conflicting evidence in your case—for example, as to whether your injury is work-related or whether you are permanently disabled—will also impact your claim’s settlement value.

To get a general idea of how much you might be entitled to, see our article on Texas workers’ comp benefits. However, a claim’s settlement value depends on many factors, which can only be evaluated by a workers’ comp lawyer familiar with your case.

Do I Need a Lawyer?

Although it’s not required, you should consider consulting with a Texas workers’ comp lawyer before you agree to a settlement. Because settlements are final, it’s important to make sure you are getting a fair amount in compensation. A lawyer can negotiate you a fair sum and structure the settlement in a way that protects your interests. (To learn how much that might cost you, see our article on attorneys’ fees in Texas workers’ comp cases.)

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