What to expect when a settlement check is issued after an insurance claim

Disclaimer: This is educational information, not legal advice. I am not a lawyer. For guidance tailored to your situation, consult a West Virginia attorney.

Detailed Answer — how settlement funds are typically delivered and handled in West Virginia

Once an insurance company issues a settlement check, there are a few common pathways the funds may take. Which path applies depends on who the payee is on the check, whether you have an attorney, whether there are medical liens, and whether the claimant is a minor or legally incapacitated. Below are the typical scenarios and what each means for you.

1) Check payable to you alone

If the insurer makes the check payable only to you, the carrier is treating you as the sole payee. You can generally endorse and deposit or cash that check yourself, but you should:

• Carefully read any release or settlement agreement before endorsing the check. Endorsing the check usually indicates acceptance of the settlement terms.
• Confirm whether any liens (medical providers, Medicare/Medicaid, subrogation, or a health insurer) must be paid from the proceeds. Even if the check is payable only to you, you remain responsible for satisfying valid liens.

2) Check payable jointly to you and your attorney (common in personal-injury cases)

Many insurers issue checks that name both the claimant and the claimant’s attorney or the attorney’s firm. This is standard when an attorney handled the claim. The usual steps are:

• Your attorney receives the check, endorses it with your authorization, deposits it into the attorney’s trust/escrow account (IOLTA/trust account), pays costs and liens, deducts the attorney fee according to your fee agreement, and issues a settlement statement and a net-disbursement check to you.
• Ask your attorney for a written settlement statement itemizing gross recovery, attorney fees, expenses, lien disbursements, and net proceeds. Most attorneys will provide this before final disbursement.

3) Check payable to multiple parties or to a medical provider and you

Sometimes insurers issue a check jointly to you and a medical provider or lienholder. That check will generally require all payees to endorse before it can be deposited. Alternatively, the insurer may issue separate checks to satisfy liens directly.

4) Minors and incapacitated claimants

When the claimant is a minor or legally incapacitated, West Virginia procedures generally require additional protections. Typical outcomes include:

• Settlement approval by a court (or by a guardian/conservator) before funds are disbursed.
• Funds placed in a blocked bank account, guardianship/conservatorship account, or structured settlement annuity so the minor or protected person cannot directly spend the funds until authorized.

Because court procedures vary and timing can be extended, ask the attorney or the court clerk what steps are needed to access funds for a minor or incapacitated person. For general West Virginia statutory materials, see the West Virginia Code: https://code.wvlegislature.gov/

5) Structured settlements and annuities

If your settlement includes a structured settlement, the process is different: the insurer (or defendant) pays an annuity carrier, which then issues periodic payments to you. You will receive documents explaining the schedule and payment mechanics. Structured settlements are often used to spread tax-advantaged payments over time for personal-injury cases.

6) Timing — when do you actually get money?

Timing depends on several factors:

• Receipt of the insurer’s check (sometimes mailed to attorney or claimant).
• Whether the check is joint-payee (requires endorsements) or single-payee.
• Pending lien resolution — payoffs to medical providers, Medicare/Medicaid, or subrogation claims must often be negotiated/paid before distribution.
• If court approval is required (minors or incompetents), funds will not be released until the court signs the order.

7) Lien and subrogation obligations you should expect

Medical providers, health insurers, Medicare, Medicaid, and workers’ compensation carriers may have valid claims against your settlement. Common points:

• Medicare or Medicaid may assert a repayment interest. If Medicare is involved, your attorney should address conditional payment and final demand procedures with Medicare. See CMS for more information: https://www.cms.gov/
• Your attorney can often negotiate reductions with lienholders, but lien resolution may delay distribution.

8) Records, taxes, and final paperwork

Get a written settlement statement and copies of all documents: the release, settlement agreement, cancelled checks, and the disbursement ledger. Regarding taxes, personal injury awards for physical injuries are often tax-free for federal income tax purposes, but interest, lost wages, or punitive damages can be taxable. Check with a tax professional for your situation.

Helpful Hints

• Do not endorse or deposit any check until you understand and agree to the release or settlement terms.
• Ask for a written settlement statement that shows gross recovery, attorney fees, expenses, lien payments, and net proceeds.
• If your attorney receives the check, confirm the attorney’s trust-account procedures and request copies of bank deposits and disbursement records.
• If Medicare or Medicaid might have a claim, alert your attorney immediately so they can protect your interests and follow required reporting procedures. See the Medicare site: https://www.cms.gov/
• If you are a minor or mentally incapacitated, expect court involvement—start that process early because it can add weeks or months.
• Consider whether a structured settlement fits your long-term needs. Ask about annuity carrier security and the payment schedule before agreeing.
• Keep personal copies of everything: settlement, release, endorsements, and bank statements showing receipt of funds.
• If anything seems unclear—especially about liens or net proceeds—ask your attorney for clarification in writing.

Where to get help in West Virginia

If you need more information about insurer practices or consumer rights, the West Virginia Offices of the Insurance Commissioner provides consumer resources: https://www.wvinsurance.gov/

For state statutes and rules that may apply to guardianship, conservatorship, or other court-ordered processes, search the West Virginia Code: https://code.wvlegislature.gov/

Remember: specific outcomes depend on the facts in your case and the written settlement terms. Consult a West Virginia attorney for advice about your unique situation.