What Is a Fair Settlement For a Car Accident?

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When you sustain one or several injuries in a car accident, you may have several questions, one of which is, how much can you expect to recover via a car accident injury claim? While the law entitles car accident victims to compensation, it does not specify how much in monetary compensation one can expect to recover. The amount for which your case settles depends on several factors, many of which are unique to your situation.

Understandably, the standard “it depends” answer can prove frustrating at a time when budgeting your finances is more important than ever. While there is no way to guarantee an amount, a skilled car accident attorney can assess your case and estimate a value based on the facts and evidence. That said, it does not hurt for you to understand the factors that most influence personal injury recoveries.

What Is the Average Car Accident Settlement Amount?

We cannot stress this enough — there is no “typical” car accident settlement amount. Due to the various factors that affect your monetary recovery, it is difficult for any attorney to throw out a ballpark figure without first reviewing the facts of your case. That said, in an attempt to understand just how much car insurance companies paid out in claims over the years, the Insurance Information Institute put together a few figures. According to the data, the average settlement for bodily injury in 2020 was $20,235. The average settlement for property damage was $4,711.

It is important to note, though, that some car accident claimants walk away with a couple hundred dollars, while others recover millions. Depending on state laws regarding shared negligence, you may not be able to recover compensation at all. It is important to understand the various factors that can affect your potential settlement so that you can prepare your case accordingly.

Knowing What Is Included in a Settlement

Most people count on their car accident settlements to pay for two main expenses: Medical bills and property damage. The truth is, though, that your damages extend far beyond medical expenses and vehicle repairs. An experienced attorney knows this and can help you push for a settlement that covers the full extent of your losses, which may include but are not limited to the following.

Past and Future Medical Bills

At the very least, your car accident settlement should be enough to cover the cost of your past and future medical expenses that arise because of your accident. Medical expenses may include the ambulance ride after the accident, emergency room care, surgery, hospitalization, follow-up appointments, medications and therapy, among other services. If you paid for your medical expenses out of pocket, or if your healthcare provider covered the cost, you or it should receive reimbursement through your settlement. If you require ongoing care, your attorney can push to have your settlement cover future medical expenses.

Past and Future Lost Wages and Loss of Earning Potential

If you sustained injuries in your accident, chances are you had to take some time off work. If your injuries are severe, they may prevent you from working even now. Whether you missed one day of work because of your accident or it has been years since you have been able to earn an income, the law entitles you to compensation for lost wages. Letters from your employer, paystubs and timesheets can verify both your customary wages and the number of days and hours of work you missed because of and since your accident.

To collect future lost wages, your doctor must provide records that indicate you have reached your point of maximum medical improvement and a statement verifying that, despite your having reached MMI, you either cannot work or cannot work in the same role because of your injuries. If you can work in a limited capacity, you may be able to recover compensation for loss of earning potential.

Property Damage

Your settlement should cover the cost of vehicle repairs as estimated by a shop of your choosing. Despite what the defendant’s insurer will try to tell you, you have the right to choose from which shop you want to seek repairs. If your insurer determines that your car is totaled, your settlement should include an amount that is equivalent to its current fair market value.

Non-Economic Damages

It is not uncommon for accident victims to sustain non-economic damages in a car accident. Unlike with economic damages, which come with receipts, bills and collection notices, non-economic damages do not come with a trail of proof. There is no way to put a price tag on your mental well-being or to calculate just how much your loss of enjoyment in life has cost you personally. Yet, that does not make non-economic damages any less valid.

Non-economic damages refer to the emotional losses you experience after an accident. Emotional losses can include everything from pain and suffering to PTSD to loss of enjoyment of life. Though the trauma of the accident itself is enough reason for you to claim non-economic damages, you may have a better chance of appealing to insurers if you suffer certain losses, such as the following:

Quantifying your non-economic damages is not easy. To make it less difficult, insurers have developed two systems: The “multiplier method” and the “per diem approach.”

Under the multiplier method, insurers assign a value — typically of between 1.5 and 5 — to your injuries based on the seriousness of said injuries, your prognosis, the impact your injuries have on your day-to-day life and the egregiousness of the defendant’s conduct. It then multiplies this value by the total of your economic damages.

If you go the per diem approach, you will allocate a daily rate to your emotional damages and multiply it by the number of days you have suffered because of your injuries. If you choose to use this method, it is crucial that you set a reasonable rate, which an attorney can help you calculate

Punitive Damages

If the defendant’s actions were particularly reckless, you may be able to file for punitive damages. Unlike compensatory damages, which is to repay victims for their losses, the courts award punitive damages to punish at-fault parties and deter future similar behavior. Whether you can collect punitive damages and how much depends on state law and other factors.

Other Factors That May Affect Your Settlement

The extent of your damages has the greatest influence on your settlement amount. However, other factors will likely come into play, including the following:

  • Negligence Laws: Though state negligence laws vary, they can affect your ability to recover compensation. If you can recover despite state negligence laws, insurers may reduce your settlement amount based on the level of fault you assume.
  • Policy Limits: In many states, you can only recover up to the at-fault party’s policy limits.
  • Gaps in Treatment: If you fail to seek treatment right away, or if you wait too long between appointments, the at-fault party may claim that you are not really hurt, or that you did not make the effort to make a speedy recovery.
  • Legal Fees: Most personal injury attorneys work on a contingency fee basis, meaning they only recover payment if a case is successful. If your claim is successful, your attorney will deduct legal fees from your settlement before disbursing it to you.

Get Legal Help

Knowing what affects your settlement is just one part of what it takes to maximize your recovery. To recover the absolute maximum amount of compensation, entrust your case to a reputable personal injury attorney who has the experience and know-how to negotiate with insurers, present your case in the best possible light and do what is necessary to protect your interests and rights. Get started on your case today — schedule a free initial consultation.


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