How Personal Injury Settlements Are Calculated

A personal injury settlement can give you some breathing room after an accident. That settlement goes a long way when you need to pay for bills and rent. But how does the insurance company decide how much to award you?

Learn more about the factors that affect personal injury settlements below.

Factors Affecting Personal Injury Settlements

The value of your settlement depends on how severe your injuries are, though the insurance company may also look at several other factors.

Medical Bills

How much did your medical treatment cost you? Medical expenses can total thousands of dollars, even for small accidents with minor injuries. You must also consider whether you’ll need ongoing treatment, such as physical therapy or medication, to help you recover.

Lost Wages

Have your injuries prevented you from working? Your personal injury lawyer will add up your lost wages and present this figure to the insurance company.

If your injuries left you permanently disabled, your award will likely be higher. A settlement may also include more compensation if you need to retrain for a job in another field.

Property Damage

Did your accident involve property damage? You can recover compensation for car repairs, damage to your home, destroyed personal belongings, and more.

Non-Economic Damages

Are you facing pain and suffering or emotional distress after your accident? Your attorney can assign a value to non-economic damages, such as a loss of companionship or reduced quality of life.

Types of Damages

In a lawsuit, the court will consider compensatory and punitive damages when it decides how much to award for your case:

• Compensatory damages reimburse you for losses incurred due to your accident. This includes both economic and non-economic damages.
• The court uses punitive damages to punish a defendant for their actions. Courts order these damages to discourage the defendant from doing the same thing again. 

It’s not common for a court to order punitive damages, though. The court may only order such damages if the defendant’s actions were particularly egregious.

How Does the Insurance Company Evaluate Your Claim?

The insurance company uses a complex formula to decide your settlement amount. It will consider both economic and non-economic damages, such as mental anguish and physical pain.

Insurance companies may use one of two formulas to calculate your settlement:

• Per diem: With this formula, the insurance adjuster assigns a value to how much you suffer each day. They then multiply this figure by the number of days they expect you to experience pain and suffering.
• Multiplier: Using the multiplier formula, the insurance company assigns a figure to your injuries based on their severity. The multiplier ranges from 1.5 to four. The company multiplies this number by the total of your special damages, such as lost wages and medical bills.

Should You Accept the Insurance Company’s Settlement Offer?

Accident-related costs can reach thousands or even millions of dollars, so it’s tempting to take the first offer the insurance company gives you. If you’re dealing with piles of medical bills now, it makes sense to accept anything the insurer offers you.

But many insurance companies will offer the smallest possible amount they think you’ll accept. Some insurance adjusters don’t want to pay you a dime more than they have to.

Before you accept, ask yourself if the settlement covers:

• Lost wages
• Diminished earning capacity
• Medical bills
• Property damage
• Pain and suffering

The settlement may seem generous now, but if you accept it and need more care than you expected, you’re unfortunately out of luck. Once you agree to a settlement, you can’t take the insurance company to court to sue for more.

If you don’t think your settlement offer is fair, you don’t need to take it. Call a personal injury lawyer for advice before you decide.

Compensation in Personal Injury Lawsuits

If you’re unhappy with your settlement amount, you may want to file a lawsuit to try and recover more damages in court. But it’s important to know that a jury doesn’t evaluate your damages quite like the insurance company does.

Factors that may affect your compensation in a lawsuit include:

• Longevity of your injuries: Do doctors expect your injuries to heal soon? Some injuries take months to heal, and that affects your damages award.
• Visibility of your injuries: The judge may be more likely to award higher compensation if the jury can see your injuries.
• Location of the lawsuit: The jury will include people who represent the local population. What do those people believe about accidents like yours? You can’t control who serves on a jury, but these people play a big role in the outcome of your case.
• Credibility: Will the jury believe your injury claims? If the jury thinks you’re exaggerating your injuries, the court may award you less in compensation.
• Likability: Often, how much the court awards you comes down to how likable the jury finds you. Jurors should try to evaluate your case objectively, but human nature may unintentionally affect their decisions.

Potential Settlement Amounts

It’s difficult to say exactly how much the insurance company or court will award for your personal injury claim. Still, you’ll have an idea of what to expect by reviewing average settlement amounts for different kinds of personal injury cases:

• The average award for a slip-and-fall accident is $15,000 to $50,000. You can expect compensation on the higher end if your injuries are severe.
• The average value of a California car accident settlement is $21,000. Again, if you’re dealing with serious injuries, your damages may be higher.
• Cases involving the death of a loved one pay higher than others. The court may award the victim’s family an average of $1 million.

Contact a Skilled Personal Injury Attorney for Help With Your Case

If you have more questions about how much to expect in a personal injury lawsuit, reach out to Khalil Law Group. Our seasoned personal injury attorneys will answer all questions about personal injury settlements and help you decide if it’s worth taking your case to court.

Call us at (714) 617-5189 for a free consultation on your personal injury case.