How Much Should You Settle for in a Car Accident?

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How Much Should You Settle for in a Car Accident?

By Steven Jensen
July 28, 2023
How much should you settle for in a car accident

A car accident’s aftermath can bring a multitude of challenges, including the daunting task of determining the appropriate settlement amount for your claim. Several factors go into calculating this, making each case unique.

At Parker + McConkie, our mission is to offer thoughtful, dedicated assistance as you navigate these complexities, helping you secure a settlement that truly reflects your losses. A typical car accident settlement for victims is designed to make you whole again by covering expenses such as property damage and medical bills; however, car accident settlement amounts can vary widely from case to case. What are a few of the factors that will determine the average settlement?

Learn more below, and reach out to a personal injury lawyer from our team who can help you with your car accident claims.

How Car Accident Settlements Are Calculated

Establishing an accurate settlement figure in a car accident claim hinges on a comprehensive assessment of damages, typically categorized as economic and non-economic. Economic damages encapsulate quantifiable losses, such as medical expenses, lost earnings, and property damage. In contrast, non-economic damages address the intangible losses suffered, including pain, suffering, and emotional distress.

The Multiplier Method and the Per Diem Method are often used to calculate these settlements. It’s crucial to understand each of them, as they can majorly impact personal injury claims.

The Multiplier Method

The multiplier method is one of the most frequently used to calculate non-economic damages. It begins with a sum of all the economic damages you’ve suffered and multiplies this total by a particular factor, typically within the range of 1.5 to 5. The selection of this multiplier relies heavily on the accident’s circumstances, considering factors like the injury severity, the recovery timeline, and the impact these injuries have on your daily life.

For instance, suppose your economic damages total $20,000, and due to the extensive nature of your injuries, a multiplier of 4 is applied. The calculation would amount to $80,000, covering your economic and non-economic damages. However, it’s crucial to remember that this is a negotiation process, and insurers may use a lower multiplier.

The Per Diem Method

The per diem (per day) method assigns a daily value to your pain and suffering resulting from the accident. This approach tends to be most effective in cases where recovery is expected, and the duration can be estimated.

For instance, a daily rate of $300 might be established, and if it took you 150 days to recover, the pain and suffering portion of your claim would be valued at $45,000. Make sure you document the recovery process carefully, as it can significantly impact the size of your settlement.

Average Car Accident Settlement Payouts

Average car accident settlement payouts

Although there isn’t a definitive “average” car accident settlement figure, as each case’s circumstances are unique, settlements can range widely. For minor to moderate injury cases, settlement figures could extend from a few thousand to tens of thousands of dollars. Cases involving serious or catastrophic injuries may result in settlements amounting to hundreds of thousands or even millions of dollars. However, these figures aren’t definitive and depend on numerous contributing factors.

Factors That Affect the Amount of Car Accident Settlements

Various factors influence the final settlement amount in a car accident claim, each carrying its weight. There are a few critical elements that can affect the settlement amount.

Insurance Coverage

One significant determinant is the insurance policy limits of all parties involved in the accident. The at-fault driver’s insurance policy typically serves as the primary source of compensation. If your damages go beyond the at-fault party’s insurance limit, you may need to tap into your insurance policy, provided you carry underinsured motorist coverage.


Establishing liability or fault in the accident is crucial to any car accident claim. In many states, if you’re found to be even partially at fault, your settlement could be lowered in proportion to your degree of fault.

Severity of Injuries

The severity and nature of your injuries will significantly impact your settlement amount. Generally, more severe injuries result in higher medical costs, longer recovery times, and a greater impact on your life, all contributing to a potentially higher settlement.

State Laws

The state’s laws where the accident occurred can also influence your settlement. Some states operate under a “no-fault” system, limiting your ability to sue the other driver unless your injuries exceed a certain threshold. Conversely, in “fault” states, you’re typically allowed to initiate a claim against the at-fault driver’s insurance company directly.

Financial Loss

The financial loss resulting from a car accident goes beyond the immediate, visible damages. It often includes a combination of direct and indirect costs that can accumulate to substantial amounts. To ensure a fair settlement, it’s critical to understand the full scope of potential financial losses:

  • Immediate Medical Expenses: These include costs incurred for emergency room visits, hospitalization, surgeries, medications, and other immediate medical care following the accident.
  • Ongoing Medical Expenses: If your injuries require long-term care or rehabilitation, these costs should also be factored into your financial loss. This may include physical therapy, follow-up visits, future surgeries, or long-term medications.
  • Future Medical Expenses: In cases where the injuries lead to permanent disability or require lifelong treatment, the projected costs for this future care must be taken into account.
  • Loss of Income: If you had to take time off work to recuperate from your injuries, you’re entitled to compensation for the wages lost during this period.
  • Loss of Earning Capacity: If your injuries restrict your ability to work in the future, either by reducing your working hours or preventing you from performing certain tasks, you may experience a decrease in your future income.
  • Property Damage: The expenses to fix or replace your vehicle and any other damaged property also contribute to your financial loss.
  • Miscellaneous Expenses: Other costs related to the accident can also add up, such as hiring help for household chores you can’t perform due to your injuries or transportation costs for medical appointments if your vehicle was damaged in the accident.

Calculating a Fair Settlement Range

Calculating a fair settlement range

Arriving at a fair settlement range involves carefully considering several factors, including a detailed assessment of your damages and strategic negotiations with the insurance company.

Assessing Economic Damages

Economic damages, also known as special damages, refer to the monetary losses resulting from an accident. It’s vital to accurately assess these damages to determine a fair settlement range. Here are some common types of economic damages:

  • Medical Expenses: These are the costs associated with the medical care you received due to the car accident. It includes hospital bills, prescription medications, physical therapy, surgeries, and any other related medical treatments.
  • Future Medical Costs: If your injuries require ongoing medical treatment or long-term care, these costs should also be included in the settlement. An expert medical opinion may be necessary to estimate these costs accurately.
  • Lost Wages: If you had to take time off work because of your injuries, you could claim compensation for these lost wages. It’s important to include all lost income, including overtime, bonuses, or opportunities for promotion missed due to the accident.
  • Loss of Earning Capacity: In other cases, the injuries sustained may affect your ability to work in the future. If your earning potential has been reduced, you can claim compensation for this loss of earning capacity.
  • Property Damage: This refers to the expenses incurred for repairing or replacing your vehicle or other property damaged in the accident. Other associated costs, such as rental car expenses while your vehicle is being repaired, can also be included.

Evaluating Non-Economic Damages

Non-economic damages, commonly known as general damages, compensate for the non-financial losses suffered due to the accident. They’re subjective and can be more challenging to calculate. However, they are just as real and significant as economic damages. Here are some common types of non-economic damages:

  • Pain and Suffering: This pertains to the physical agony and inconvenience you experienced as a result of your injuries. It considers the severity and duration of your pain.
  • Emotional Distress: Car accidents can result in significant emotional trauma. Anxiety, depression, sleep irregularities, and post-traumatic stress disorder (PTSD) are common. Compensation for emotional distress acknowledges this impact.
  • Loss of Enjoyment of Life: If your injuries preclude you from enjoying activities and hobbies you previously enjoyed, you can be compensated for this loss.
  • Loss of Consortium: If your injuries have adversely affected your relationship with your spouse or family, you can claim compensation for loss of consortium.

Considering Punitive Damages

In certain cases where the at-fault party’s actions were particularly egregious or reckless, you may be entitled to punitive damages. Unlike other damages, these are not meant to compensate for your losses but rather to penalize the at-fault party and dissuade similar behavior in the future.

Negotiating With the Insurance Company

Negotiating a settlement with the insurance company is a nuanced process. Initial offers from insurers often may not reflect the full extent of your damages. Enlisting an experienced car accident attorney can prove invaluable in these negotiations, helping to secure a fair settlement that accurately represents your losses.

Every car accident case is unique, with various factors influencing the settlement. At Parker + McConkie, our skilled car accident attorneys are dedicated to providing the guidance you need to navigate this process effectively. Call us today for expert legal advice, and let us advocate for your rights and help secure the best possible outcome for your case.

Contact Our Experienced Car Accident Attorneys at Parker + McConkie Today for Legal Advice

Contact our experienced car accident attorney

Ensuring a just and equitable settlement after a car accident is complex. While this guide provides an overview, every case is unique and demands personalized legal counsel. At Parker + McConkie, our experienced car accident attorneys possess the expertise and know-how required to navigate the intricacies of your case. Our team will offer compassionate guidance, backed by strong legal understanding, to help you confidently move forward after your car accident.

Contact Parker + McConkie today. Let’s discuss your case and explore your options. Your journey toward recovery and rightful compensation starts here.

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