How you will receive settlement funds after an insurance company issues a check — Oregon FAQ
Short answer: How you actually receive settlement money depends on whether you have an attorney, whether the check is payable to you alone or jointly (for example, to you and your lawyer or to you and a medical provider), and whether any liens, subrogation claims, minors, or estates are involved. In Oregon the common sequence is: insurer issues a check → check is mailed to either your attorney or you → if you have counsel it is usually deposited into the attorney’s client trust account, liens and fees are paid, and your net share is sent to you by check or electronic transfer.
Detailed answer — step‑by‑step
Below is a typical, practical breakdown of steps you should expect after an insurer issues a settlement check in Oregon.
- Who is the check made payable to?
Insurance companies often make checks payable to more than one party. Common payees include the injured person, the injured person’s attorney, and any medical provider or health insurer with a lien or subrogation claim. If the check is payable solely to you and you are not represented, you can endorse and deposit it yourself (subject to any payee requirements listed on the check). If it is payable to you and your attorney, both endorsements are usually required.
- If you have an attorney
Most personal-injury attorneys will ask the insurer to send the check to the law firm. Upon receipt the attorney will:
- Deposit the funds into the firm’s client trust (IOLTA) account as required by professional rules.
- Prepare a written settlement statement showing gross recovery, attorney fees, costs, and any deductions (medical liens, subrogation, outstanding bills, case costs).
- Resolve or set aside money to satisfy liens (health insurers, medical providers, Medicare/Medicaid subrogation) or negotiate reductions if possible.
- Send you the net proceeds by check or electronic transfer after finishing administrative steps.
If you are wondering about attorney trust accounts and handling of client money, the Oregon courts and the Oregon State Bar provide rules and guidance about holding client funds. For general Oregon court information, see the Oregon Judicial Branch: https://www.courts.oregon.gov/.
- If you are unrepresented
The insurer will usually mail the check to you. If the check is made payable solely to you, you can endorse and deposit it. If the check names other payees (for example, a hospital or an attorney), you will need any required co-payee endorsements or to work with the other payee to clear the check.
- Medical liens, health-insurer subrogation, and Medicare/Medicaid
If a medical provider, private health insurer, or a public payer (Medicare/Medicaid) has a lien or subrogation claim, the payor may require payment from the settlement proceeds. Your attorney often handles these claims and negotiates reductions. If you anticipate Medicare coverage, your attorney should address Medicare’s conditional payment and reimbursement demands before distributing funds. For general information about insurance consumer protection in Oregon, see the Oregon Division of Financial Regulation: https://dfr.oregon.gov/insurance/Pages/default.aspx.
- Minors and incapacitated persons
Settlement funds for minors or persons under guardianship/ conservatorship often require court approval or a guardian/ conservator to receive funds on the person’s behalf. Oregon courts control distributions for minors and protected persons. Contact the court or an attorney if the injured person is a minor or legally incapacitated. For court procedures, see the Oregon Judicial Branch: https://www.courts.oregon.gov/.
- Deceased claimants and estate claims
If the person who had the claim dies before the insurer issues the settlement check, the settlement often becomes part of the decedent’s estate. Oregon probate procedures will govern distribution; a personal representative or the probate court will usually be involved.
- Timing
How long you wait varies. If the insurer mails a check to a law firm, expect a few business days to several weeks for the attorney to clear liens and disburse net proceeds. If the insurer mails a check directly to you and no liens exist, you can usually deposit it immediately but banks may place a hold.
- Delivery method
Once your attorney disburses funds to you, payment can be by paper check, bank wire, or electronic transfer depending on the firm’s practices and your preferences. If you receive payment directly from the insurer, it will typically be a mailed check unless the insurer offers an electronic option.
If a payment is delayed or the insurer issues the check incorrectly: contact your attorney or the insurer to correct payee names, resolve outstanding lien claims, or request stop-payment/reissue. If you suspect bad faith or delay by the insurer, you can explore filing a consumer complaint with Oregon’s Division of Financial Regulation: https://dfr.oregon.gov/consumer/Pages/consumercomplaint.aspx.
Taxes and reporting
Tax treatment depends on the nature of the claim. Generally, compensatory awards for physical personal injuries or physical sickness are not taxable under federal law, while punitive damages and interest may be taxable. Tax rules are federal and state dependent. Always consult a tax professional before assuming tax consequences. For more information, see the IRS guidance on settlement proceeds: https://www.irs.gov/.
What you should do now
- If you have an attorney: confirm where the insurer will send the check and get an estimate of the timeline for lien resolution and disbursement.
- If you don’t have an attorney: ask the insurer who the check will be made payable to and whether any third‑party payees (medical providers, health insurers) exist.
- Keep copies of the settlement agreement, any release, and the settlement statement showing deductions and net payment.
- Consult a tax advisor about reporting requirements for your situation.
Disclaimer
This article is educational only and is not legal advice. It does not create an attorney‑client relationship. Laws and procedures change; consult a licensed Oregon attorney for advice about your specific situation.
Helpful Hints
- Ask the insurer and your lawyer in writing where the check will be sent and who the payees are.
- Request a detailed settlement statement before disbursement so you can verify fees and lien payments.
- If Medicare or Medicaid may have paid for care, notify your attorney immediately so conditional-payment issues are addressed.
- For minors, expect additional court papers or a structured settlement if the amount is substantial.
- Keep records of all communications and copies of any checks and endorsements until the matter is fully closed.
- If the insurer delays unreasonably, you can file a complaint with the Oregon Division of Financial Regulation: https://dfr.oregon.gov/consumer/Pages/consumercomplaint.aspx.