How Are Car Accident Settlements Calculated?
Car accidents can be traumatizing and horrific. In severe situations, victims may sustain debilitating injuries that require extensive medical treatment and rehabilitation. Victims may also be unable to work for an extended period of time, resulting in a loss of income. Car accident settlements are calculated to compensate victims for the losses they have suffered. The goal of settlement payouts is to help victims make a financial recovery from medical expenses, loss of income, and other damages that an accident victim may incur during their recovery time.
When you start the process of a car accident claim with the help of your personal injury lawyer, you might be wondering what your auto settlement will be worth at the end of the line.
Calculating car accident settlements is no easy feat. Even more so when many determining factors go into how much the case is worth as a whole.
When a claim for damages process starts, both an insurance claims adjuster and your experienced car accident injury lawyer will use varying formulas to determine the possible value of your settlement. And while its monetary value isn’t set in stone from the beginning, these preliminary calculations will help you average the value of your case through the car accident injury claims process.
For auto accidents, settlement values are calculated by the number of damages that will be awarded to the victim (plaintiff) and their worth. These damages will normally be paid by the at-fault driver or party (defendant) and their insurance provider. It is good to know that while it might be tempting to deal with the claims process on your own, the defendant’s insurance company will most likely try to cheat you out of a fair settlement.
Hiring a knowledgeable auto accident lawyer to handle your case will get you a settlement offer that is worth five to seven times or more than what the defendant’s insurance offers. Not only that, but insurance companies will most likely try to compensate you as quickly as possible, not caring about your well-being or the consequences of the accident.
At Farahi Law Firm, our experienced car accident attorney will hold the insurance’s hands to the fire and will make them pay the real value of your settlement. Our accident injury lawyers will fight for your rights and get you the maximum compensation you deserve for the injuries and damages you’ve suffered due to the accident.
What Is the Average Settlement Amount?
How are car accident settlements calculated? The average amount of compensation one could get in a car accident claim is a common question, and surely accident victims are eager to know when they start their claims process. But sadly, there’s no standard amount that can be used as an average.
Why is that? Because all car accidents are different and have many factors to them that can maximize or lower the settlement amount. Medical bills, property damage repairs, insurance coverage limits, special damages, and more contribute to the monetary compensation you will receive at the end of the claims process.
With the help of an attorney, all these damages can be worth more, while letting just the insurance adjusters handle your claim could hinder you from receiving an adequate settlement.
What Kind of Damages Are Awarded in a Car Accident Settlement?
In a personal injury claim relating to a car accident, the awarded damages for the victims are called compensatory damages. As the name states, these are awarded to compensate for losses, both economic and non-economic.
There’s a third type of compensatory damage that can be awarded under special circumstances, called punitive damages. These are awarded to punish the at-fault party for particularly grievous or underhanded behavior towards the victim.
The compensatory damages are categorized as follows.
These are awarded to help the victim return to their financial situation before the accident. These normally include:
Auto accident victims are bound to incur medical expenses to be paid for the treatment a victim receives, like physical therapy. These economic damages are awarded to do just that. In a bodily injury claim, the liable party is required to cover your medical costs both present and future to ensure you have a healthy recovery from your automobile accident. This is why it is important to keep all your medical records regarding your accident injuries.
Loss of Income and Earning Capacity
Because of the accident, you will miss work due to medical procedures, property damages, and pain and suffering from the accident. Both physical and psychological, which could severely affect your income and finances. When your injuries affect you to the point where your capacity to earn future wages is diminished you will also be awarded reasonable compensation for loss of earning capacity
Property Damage or Loss
The material losses as a result of the accident, be it your vehicle or any other items that were lost due to the accident, are commonplace. Because of this, you’ll be awarded compensation for the auto body repair or recovery of the property at a fair market value over the price of your losses.
Non-economic damages or subjective damages are awarded to the victims of accidents for losses or client expenses that cannot be readily assigned a clear monetary value. While it can be a broad category, subjective damages normally deal with:
Pain and Suffering
The physical pain and suffering that can come from an accident is no simple matter, such as the psychological scars that can appear from the event. While difficult to calculate, your attorney can help you make an estimate based on your particular circumstances and the repercussions of your car accident.
One of the hardest types of damages to estimate, emotional distress varies from person to person.
For example, let’s say an office manager and a professional jazz piano player get in an accident and both break their dominant hand and forearm. The office manager can return to work and continue his daily tasks much quicker than the jazz pianist. The pianist will not be able to professionally do his job due to muscle memory loss and atrophy that comes from having their hand and arm in a cast for an extended period and the rehabilitation time for him to play piano as he once did. This can cause severe emotional distress and even PTSD (Post-traumatic stress disorder) to the victims of an accident.
Reduced Enjoyment and Quality of Life
This is intrinsically tied to the previous point, using our previous example of the office manager and the jazz pianist. The office manager might have done wood carving as a hobby, so having their dominant hand broken will reduce the enjoyment of their favorite pastime from the inability to partake in the activity. This is called “quality of life” reduction and will be taken into account during the legal procedures and hearings to determine your settlement value.
Factors to Take into Account for Settlement Calculation
There are different factors used to calculate the worth of your personal injury settlement from a car accident. A wide array of factors will affect the calculations made both by your insurance adjuster and your personal injury attorney.
As mentioned earlier, you have to bear in mind that accident settlement amounts vary from accident to accident. A serious accident involving multiple injured parties or wrongful death will be worth more than a minor fender-bender.
How are car accident settlements calculated? The most important factors to calculate your auto accident settlement are:
- Economic damages
- Non-economic damages
- Circumstances of the accident
- Insurance Policy limits
- Degree of fault in the accident
- Statute of limitations
Although insurance policy limits play a big part in calculating settlements, if you want to handle your insurance claim without an experienced attorney, the insurance company of the party at fault will always try to lower your compensation as much as possible.
The degree of fault is another contributing factor. Because California rules itself under Comparative Negligence, this means that if you had any percentage of fault in the accident, it will reduce your settlement by the same percentage. For example, if you are found to be 20% at-fault, you would still receive 80% of the settlement.
How Are Car Accident Settlements Calculated?
As mentioned before, there are many ways to calculate the value of your settlement after an accident, and while they aren’t entirely precise. Some formulas serve as tools to calculate an approximation of the total accident compensation you can receive.
The most common method of calculation is called the multiplier method. It is commonly used by insurance adjusters to judge the severity of your damage, as well as account for your pain and suffering.
With the multiplier method, insurance adjusters take the economic damages, special damages, and the consequential expenses from the accident and add a multiplier number depending on the nature of these factors.
For example, if you accumulated $50,000 in medical expenses, the adjusters will deduce that you had surgery or an extended amount of time at the hospital as well as recurring treatment for your injuries, lost wages, etc. They will then add a multiplier between 0.5 and 5 and use that to create an estimate. Let’s say your expenses and damages totalled $100,000, and we use a multiplier of 2, your settlement would technically be worth $200,000.
But always bear in mind that insurance companies are not your friends. They are in the business to make money, not take your well-being into account.
Why Should You Hire a Car Accident Attorney to Help You?
When dealing with insurance adjusters, claims, and all the expenses that come with a car accident, an experienced car accident attorney will help you navigate through this process with ease. With us working on your case, we will be on top of all the paperwork and math that goes into determining your settlement amount.
Our expert personal injury attorneys specializing in car accidents are trained to navigate the claims process and fight against the low-ball offers and tactics from insurance companies to lower your compensation amount.
We will get you the medical treatment you need and the money you deserve! There’s nothing more important to us than your well-being. With Farahi Law Firm, you will not have to worry about accident lawyer fees while recovering. We charge no fees unless we win!
If you ever get in an accident, don’t hesitate to contact your expert personal injury attorneys at Farahi Law Firm, APC, at (844) 824 – 2955 for a free consultation and review of your case. Your Justice is Our Cause!