Definition of Settlement
A settlement is an agreement between the insurance company and the injured party to compensate the victim for their loss. Settlements can include payment for lost wages, medical costs, future wages, etc. Most claimants who are injured in a personal injury case should consult with a lawyer prior to accepting a settlement offer from an insurance company.
Most personal injury cases are settled out of court through alternative conflict resolution which include mediation and arbitration. It is not uncommon for each party to agree to a settlement offer to avoid taking the case to court, which can result in high costs for both the plaintiff and the defendant.
In some cases, such as a car accident claim for an uninsured motorists, (when you are forced to bring a claim against your own insurance company) the agreement to settle the case through arbitration is already included in the insurance contract and you will not have an option to file a lawsuit because arbitration will be binding.