How Are California Car Accident Settlements Calculated?

Motor vehicle accidents are common in California. Just in the first six months of 2022, the National Safety Council (NSC) logged a total of 21,340 catastrophic car accidents. People involved in these types of situations are harmed in a variety of ways, either physically, emotionally, or financially. 

For many car accident victims, property damages could severely affect their lifestyle, especially if the vehicle is indispensable to them. This is why, in California and the rest of the country, lawsuits for car accident compensation are so common.

What is a Car Accident Settlement?

A car accident settlement is an agreement between the involved parties – insurance companies and victims. The payment agreement seeks to compensate the injured victim for losses related to the accident, such as medical bills, property damage, and other expenses.

The settlement amount is agreed upon by both parties after careful consideration of all the facts surrounding the accident.

What Are Included In A Car Accident Settlement?

If another party’s negligence or fault caused the accident, then the victim is potentially entitled to a settlement that can help cover property damages and medical expenses. Such an agreement could prove invaluable in assisting with recovery from any injuries sustained in the incident.

The amount recovered in car accident settlements can depend on the damages suffered and the amount of insurance coverage carried at the time The victim may be able to recover compensation for medical costs, loss of wages, repairs, pain and suffering, and other economic and non-economic damages.

car accident settlements

Economic Damages

Losses incurred due to a car accident, such as medical bills and lost wages, are known as compensatory damages. These recompense the victim for their tangible suffering associated with the incident. Some examples are:

  • Past and future medical expenses (including mental health medical treatments, prescription drugs, home health care, etc).
  • Property damage (vehicle, working tools inside of the car, computers, glasses, phones)
  • Lost wages – loss of earnings (if the victim is unable to work weeks or days)
  • Lost earning capacity (if the victim is disabled and cannot work anymore)

Non-Economic damages

Damages refer to monetary awards granted as compensation for an individual’s emotional or psychological harm caused by another person’s negligent actions. Non-economic damages may include:

  • Pain and suffering
  • Emotional distress and mental anguish (ex. PTSD)
  • Physical impairment (such as loss of the use of a limb or organ)
  • Disfigurement (a big scar or severe scars that need plastic surgery)
  • Unjust hardship (struggles the victim must go through)
  • Loss of consortium (If the victim is no longer able to provide to their partner what they used to before, is not able to take care of the children, and how it affected both partners)
  • Inconvenience (driving to appointments, leaving children with the nanny, etc.)
  • Loss of enjoyment of life (constant pain and depression)

Punitive Damages

Punitive damages are financial compensation given to a victim as punishment for the negligent actions of another person. Unlike regular forms of reparation that seek to make up for an individual’s injuries, punitive damage awards attempt to deter future negligence by demonstrating its serious consequences.

How To Calculate A Car Accident Settlement?

To calculate car accident settlements in California, a variety of factors are considered. These include the type of damages sustained, the at-fault driver’s coverage, any medical costs, and the amount of time you’ve been off work due to the accident.

Generally, damages may include economic, non-economic, and punitive damages, depending on the circumstances of the accident and any applicable laws in the state.

Using formulas to calculate car accident settlement amounts can help to ensure that the injured party can receive a fair average settlement for a car accident. Some of the most common are:

Multiplier Formula

The multiplier formula is a method used by an insurance adjuster or an experienced car accident lawyer to calculate general damages in personal injury cases. It involves multiplying the plaintiff’s special damages (out-of-pocket expenses, such as medical bills and loss of income) by a number, or “multiplier,” to arrive at the amount of general damages.

The multiplier is chosen based on the severity of the injury, the length of time the injury is expected to last, and other factors.

Per Diem Formula

The per diem formula is another method used to calculate general damages in personal injury cases. It involves determining the number of days the plaintiff was unable to work or participate in normal activities due to the injury and then multiplying that number by a daily rate to arrive at the amount of general damages.

The daily rate is typically based on the plaintiff’s average daily income, but can also take into account other factors such as the cost of living in the plaintiff’s area.

It is important to consult with a reliable personal injury attorney to determine the most appropriate method for calculating general damages in a given case and obtain fair financial compensation for your injuries and damages. 

Can My Car Accident Settlement Be Lower?

Aggressive insurance adjusters and insurance companies often seek to lower the amount of monetary compensation in car accident settlements. This is because they are primarily looking out for the welfare of the insurance company, rather than the injured person. That’s why you need an expert legal team by your side to fight for you.

Navigating the complex process of dealing with insurance companies and their aggressive adjusters can be stressful, especially when you realize that certain elements can lead to a lower settlement amount in your case. It’s important to keep the following in mind during these negotiations so as not to get taken advantage of.

  • Comparative negligence: If the plaintiff is found to be partially at fault for the accident, this can reduce the amount of the settlement.
  • Lack of evidence: If there is insufficient evidence to support the plaintiff’s claim, this can decrease the settlement amount. It is important to collect all the evidence possible at the moment of the crash, and after that, a qualified team can help your case gather the evidence necessary to win. 
  • Inadequate damages: If the plaintiff’s damages are not significant enough to justify a higher settlement, this can lead to a lower settlement. 
  • Pre-existing injuries: If the plaintiff had pre-existing injuries that were exacerbated by the car accident, this can reduce the settlement amount. You may need a team of professionals who can understand your medical reports and use this information to find the best way possible to fight. 
  • Insurance policy limits: The settlement amount may be limited by the defendant’s insurance policy limits. Having an experienced insurance policy limits attorney will ensure that your legal rights are respected and a fair settlement is achieved.
  • Uncooperative defendant: If the defendant is uncooperative or refuses to accept responsibility for the accident, this can lower the settlement amount. Dealing with difficult people is exhausting work, which is why you need a compassionate, yet aggressive lawyer, who knows how to handle your case. 
  • Statute of limitations: If the plaintiff waits too long to file a claim, this can decrease the settlement amount or result in the claim being barred altogether. 

Call Farahi Law Firm To Get The Justice You Deserve

If you have been involved in a car accident, it is critical to speak with an experienced personal injury attorney immediately. They can provide insight into the value of your case and advocate for a fair settlement on your behalf. At Farahi Law Firm, we are well-versed in this process and work hard to ensure that our clients obtain justice!

Trust in a legal team of experienced attorneys, doctors, and case handlers ready to fight for you. You can rest assured that we will stand by your side every step of the way to make sure your rights are fully protected.
Call us now and get a free initial evaluation of your case.

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