How Car Accident Settlements Are Calculated

If you or your loved one suffered a car accident because of someone else’s careless driving, you may be eligible for compensation. To understand the potential worth of your case, you need to know how insurers calculate the worth of car accident settlements in California.

What Car Accident Settlements Include

A car accident injury settlement encompasses two types of damages: economic and non-economic. Economic damages include all the measurable expenses and losses the accident triggered, such as:

  • Medical bills
  • Lost wages
  • Property damage (like the cost of vehicle repair or replacement)
  • Other accident-related expenses (like traveling costs associated with your medical treatment)

Car accident victims are also eligible for compensation for non-economic damages like:

  • Physical pain
  • Emotional suffering
  • Reduced quality of life
  • Loss of consortium and companionship
  • Scarring and disfigurement

In rare cases, car accident settlements may also include punitive damages. You could collect punitive damages if the at-fault driver’s conduct was especially reckless or malicious. This type of damages usually belongs to cases that go through the court system, whereas the vast majority of car accident cases settle out of court.

Calculating Damages for Car Accident Cases

Calculating damages in car accident settlements usually starts with adding up all the costs you have already incurred, like medical expenses, travel costs, and missed days at work. Careful documentation is vital to make sure every eligible loss counts toward your claim.

However, settlement calculations also include two more complicated elements: future damages and pain and suffering. The first refers to prospective accident-related costs and losses you will likely shoulder throughout your lifetime, while the second includes noneconomic damages.

Prospective Damages in Car Accident Cases

If your accident led to long-term or permanent injuries, you may suffer the consequences throughout your lifetime. You may need surgery, rehabilitation, or designated medical equipment down the road. You may lose your ability to work or have to switch to a less strenuous line of work to accommodate your disability. These prospective future damages will also play a part in calculating your settlement.

Unlike damages that had already occurred, which are simple enough to add up, prospective damages leave considerable room for negotiation. Estimates by medical professionals and occupational counselors may supply the groundwork for determining future losses.

Insurance companies may try to downplay the worth of prospective damages, for example, by claiming that your chances of needing specific future treatment are not that high. Because of this, in some cases, it’s advisable to wait for Maximum Medical Improvement (MMI) before filing a claim. This waiting period could help you and your car accident attorney reach a more accurate estimate of prospective damages by seeing how much your condition can improve.

Pain and Suffering in Car Accident Cases

The term “pain and suffering” covers all the non-measurable but tangible damages you may experience after a car accident, from the loss of your daily jogs in the park to your frustration about having to rely on family for daily errands. So how do you evaluate reduced quality of life?

Car accident settlements incorporate pain and suffering using one of two methods: per diem or multiplier.

The Per Diem Approach

The per diem method for calculating pain and suffering damages assigns a set compensatory amount to each day you spend recovering. This approach is practicable for short-term injuries with limited recovery times.

The Multiplier Formula

The multiplier approach to pain and suffering involves calculating all economic damages and then multiplying it by a set factor, typically from 1.5 to 5.

For example, let’s say the total of your past and prospective economic damages is $50,000. Your personal injury attorney negotiates a multiplier of 3, which brings your settlement up to $150,000.

The value of your multiplier generally depends on the extent and permanency of your injuries. Thus, if you suffer grave and lasting injuries, your final settlement is more likely to include a higher multiplier for pain and suffering.

Determining a pain and suffering multiplier may involve back-and-forth negotiations with the insurance company. You and your car accident attorney may start with a demand at the higher end of the range, while the insurer may make a lower counteroffer. Then your lawyer may help you decide between accepting the offer and filing a lawsuit against the insurer.

What If You Were Partially at Fault for the Accident?

In California, car accident settlements follow a principle known as pure comparative negligence. Under this approach, the amount of your settlement depends on your percentage of fault for the accident.

Let’s say the total worth of your claim is $100,000. If the accident occurred because a drunk driver rear-ended you, you might expect that driver to carry 100% of the fault. But if you also broke traffic regulations and the investigation determines you are 25% responsible for the accident, your settlement would drop to $75,000.

How to Improve Your Chances of Winning an Adequate Settlement

The steps you take after a car accident could influence the outcome of your case and the amount of your settlement. To protect your interests and maximize your potential settlement offer, make sure you:

  • Document everything. Save photo and video evidence, witness contact details and testimonies, the police report, and your written account of the accident.
  • Seek medical care immediately after the accident. Keep every medical record and bill.
  • Be careful when communicating with insurance company representatives. Avoid statements that may compromise your claim (e.g., “I’m not in a lot of pain”), and never accept a settlement offer before consulting an attorney.
  • Retain an experienced local car accident lawyer as soon as you can and start building your claim.

Contact Khalil Law Group for Skilled Legal Guidance and Support Throughout Your Car Accident Claim

When it comes to car accident settlements, a proficient and dedicated legal team can make all the difference. Contact Khalil Law Group today for assertive, reliable support throughout your case, from gathering evidence through negotiating a settlement offer until a final claim resolution.

Call (714) 617-7870 or complete our online form to consult a car accident lawyer in Newport Beach, CA.

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