Realistic Expectations: How Much Money to Expect From Car Accident Settlement

People may see case results on an attorney’s website and notice substantial settlement figures. Meanwhile, other successful cases resulted in lower numbers. The difference shows the wide range of settlements a motor vehicle collision claim may deliver.

Nevertheless, people may be unaware of how much money the at-fault party owes for their losses. Victims of a car accident may seek a lawyer, wondering how much they can expect from their car accident claim. Having a car accident lawyer can prove beneficial for your case and situation.

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How to Calculate Compensatory Damages

The calculation of a car accident settlement may vary from firm to firm. Even the court may determine a different estimate than a lawyer. Finding a settlement figure requires weighing multiple elements that impact a claim’s worth. Nevertheless, people can utilize established formulas to get an idea of the compensation to request from the defendant.

A common way people calculate settlements is to add the total cost of compensatory damages or economic and non-economic damages. Economic damages include the sum of your current and future medical expenses, property damage, and current and future lost income. They include any other damages that carry a specific dollar amount.

Non-economic damages include subjective losses, such as pain and suffering, loss of quality of life, and loss of relationships. The lawyer increases the requested figure by the estimated non-economic impact of your specific accident.

Alternatively, a lawyer may calculate non-economic damages through the per diem method. The method is a daily rate the attorney applies to pain and suffering. They apply the rate to each day you suffered following the accident.

The final estimate of economic and non-economic damages can become a basis for settlement negotiations. Your attorney will attempt to get the opposing party to settle near the established figure to ensure your losses are covered.

Punitive Damages

A few car accident cases see punitive damages as part of the settlement. A judge will only award these damages to punish the defendant for egregious or intentional behavior. When awarded, the average amount levied against the liable party is around $64,000, but it is at the judge’s discretion.

Punitive damage calculations can be different in each state. Nevertheless, courts generally consider the category of damages to be proportionate to its compensatory counterpart. To calculate, the judge will use the sum of economic and non-economic damages and increase the number by a specific amount.

Many jurisdictions cap punitive recovery or do not allow punitive damages to exceed the compensatory losses by a significant margin.

How Much You Can Expect From Car Accident Settlement

According to the Insurance Information Institute, the average amount insurers pay for car accident claims is over $20,000. However, the value of each claim is unique, and an experienced car accident attorney can help determine the expected value of your specific accident. Attorneys can gather the facts and evidence that impact your claim before they can come up with an estimate.

Common Contributing Factors

Insurance companies and lawyers take several elements into account when negotiating a settlement.

The value of a car accident lawsuit may depend on:

• The available insurance money. Insurance plans have coverage limits. A policyholder’s insurer may only pay up to a specific amount after a collision.
• The injured party’s statements. The insurer can use an injured party’s statements against a claim. An insurance adjuster may look for a way to shift liability to the victim by focusing on any words of guilt.
• Type and severity of injuries. Substantial injuries require more treatment and long recovery periods. As a result, someone can claim more compensation in a lawsuit. Severe back and traumatic brain injuries usually have higher settlement values.
• Permanent injuries. A lawsuit’s value increases if the plaintiff sustains a permanent injury. A person who becomes disabled faces high medical bills and disruptions in their daily life.
• Mental and emotional suffering. The mental health consequences of a collision raise a case’s worth. A person may not enjoy their life as they did before the accident. A credible mental health professional can establish emotional suffering in a lawsuit.
• Amount of evidence. The plaintiff may struggle to receive adequate reimbursement if they do not have sufficient evidence. You are more likely to get a higher settlement if you gather enough proof of the other party’s negligence and the effect on your life.

Once your lawyer understands the facts of the case, they can tell you what you can expect in a car accident settlement.

What Damages Can Children Claim

The CDC reports around 91,000 children under 12 suffer injuries yearly. A child may have a separate claim from their parents and receive compensation for their damages.

Children may require ambulance services, emergency and follow-up treatment, surgeries, and more. Depending on the injury, a minor could require long-term or lifelong medical care.

Debilitating injuries might affect a child’s future earning capacity. The court may have the defendant pay for a child’s long-term losses.

Like adults, minor victims can claim non-economic damages. A lawyer will include the losses related to their injuries’ lasting mental health effects.

Even though a minor’s claim is separate, the parent initiates the case. A state may allow children to file claims if they qualify as emancipated minors.

What Makes a Minor’s Claim Different?

The presence of an underage victim can affect a car accident case’s procedure. For instance, many states can suspend the statute of limitations until the person turns 18. This rule dictates how long an injured party has to file a claim after an accident. For a minor, the court may begin that time limit after their 18th birthday so they can file a claim themselves.

Additionally, some states require a judge’s approval to settle a case on a minor’s behalf. The court ensures the settlement agreement is in the child’s best interest.

Additionally, minors usually cannot access their awarded funds until they turn 18. The compensation goes into a designated bank account and often requires a parent or guardian to use the money only for the minor’s benefit.

Keep Records of the Collision

To support your claim, be sure to keep records of the costs and losses from the accident. Accurate documents should include healthcare bills, repair bills, medical records, and a police report. This evidence can show the insurance company the basis of your claim.

Hire a Car Accident Lawyer

A car accident lawyer increases the chance of securing a fair settlement for your injuries. They know how to speak to insurance companies and frame your strongest arguments. Your attorney knows the insurance company’s tactics and will remain persistent to ensure they offer a fair settlement or take your case to court.

Send a Detailed Demand Letter

An attorney can ensure the demand letter to the insurance company has sufficient details. They will describe the collision and the injuries you sustained. The demand letter should include information about the medical treatment you received and the severity of the vehicle damage.

The details provide reasoning for the dollar amount requested.

Emphasize the Strongest Points

An attorney can communicate with the opposing side and reiterate the strong points in your favor. They can use the evidence you collected to remind the insurer of the facts and figures of the case. Additionally, they can emphasize the non-economic effects of the accident, like your mental anguish.

Negotiating a Higher Settlement

Negotiations with the insurance company can become frustrating. The insurer may pressure you to take a low initial settlement, praying on the need for compensation to cover mounting medical bills. In addition, they may not be willing to budge on a counteroffer, claiming that their offer is the most money available. A lawyer can help by handling these negotiations and pushing back against the insurer to ensure you receive adequate compensation.

Can You Deny a Settlement Offer?

You can refuse a settlement offer whether you file a claim with an insurer or a lawsuit against the defendant. The other side might start their offer far below your needs in the hope that you are uninformed and will accept. Work with an attorney to establish what a fair offer looks like, so you can confidently evaluate any offers made.

You can request a counteroffer, and your attorney can approach the opposing party. They may accept the counteroffer or reject it. Insurers prefer to settle out of court because litigation is expensive and the results are uncertain. Therefore, you may be more likely to get a higher settlement to avoid court.

However, if the insurer fails to make a fair offer, your lawyer can take your case to trial to seek maximum compensation. Your attorney can advise you on what course of action will give you the best chance at a fair settlement.

Should Your Case Go to Trial?

A trial is costly for both sides in a lawsuit. While you may not pay the expenses for trial immediately, your attorney deducts those costs from any settlement you receive. Therefore, the final payment may seem smaller than expected.

Moreover, the injured party has to wait longer for the opportunity of reimbursement. A lawyer must submit additional legal filings, and the court has to set a date. The date may change, and the trial could take months to occur. Furthermore, complex cases may take days, weeks, or even years to conclude.

Another reason why people try to prevent a trial is the unpredictable outcome. A judge or jury decides the verdict of your case. You have to weigh the possibility of the court deciding against your favor.

You may avoid the risks of a trial since the insurance company will likely attempt to settle beforehand. They face the same costs and uncertainty, and the court may require the insurer to pay significantly higher compensation than if they settled.

Is a Car Accident Settlement Taxable?

After receiving settlement money, you may wonder if you need to pay taxes. The IRS has guidelines regarding car accident compensation and taxation. Generally, you do not have to pay state or federal taxes on your settlement.

Car accident damages compensate a victim for healthcare expenses, missed income, and other related losses. Therefore, federal law does not consider a settlement part of their income. However, the person may need to report the settlement as other income if they previously claimed medical expense tax deductions for the injury.

Another exception to the compensation tax rule is interest. Many courts add interest to the awarded damages. The amount depends on how long the case was pending. Some people might get years’ worth of interest on their unpaid verdict and need to report that additional amount to the IRS.

Furthermore, you must report to the IRS if you receive a settlement for non-economic damages only. In addition, punitive damages are typically taxable. Lawyers usually request the judge to divide the verdict into compensatory and punitive damages for the client’s taxation convenience.

One way to ensure your settlement remains as non-taxable as possible is to add clarity to the settlement agreement. You might have a separate non-personal injury claim against the defendant. As a result, you should explicitly state which part of the compensation relates to your car accident injury case to avoid lumping taxable and exempt settlements together.

If a car accident has injured you, you may be able to seek compensation for your losses. Each accident is unique, and a lawyer cannot guarantee how much you can recover.

Go into settlement negotiations understanding what you deserve for your losses. Contact an experienced personal injury lawyer for your free consultation. A legal professional can obtain the evidence to calculate the value of your claim and fight for a fair settlement.