How Much to Expect from a Car Accident Settlement

Who Pays When You Sue After a Car Accident?

Jacoby & Meyers, LLP routinely represents victims of New York/New Jersey/Connecticut car accidents. One thing our clients most often want to know is how much money they should expect to get from a car accident settlement. This blog post explores the answer to that question in detail, but here is the one line answer:

It depends.

A wide range of factors goes into determining how much a car crash settlement ought to be worth. The best way to figure out how much you should expect from a settlement is to speak with an experienced area car accident injury lawyer right away.

Settlements Explained

Let’s back up half-a-step and explore first what we mean by the term car accident settlement.

Car accidents cause damage to property and, more dangerously, to human beings. In fact, motor vehicle accidents represent a leading cause of preventable injuries and fatalities in the United States year-in, year-out. Those harms and losses come with a significant financial cost, which we discuss in greater detail below.

In America, we hold the person or entity whose actions or decisions caused a car crash legally liable to the crash victims for those financial costs. In the vast majority of cases, the legally-liable person or entity carries a liability insurance policy that serves as a source of payment in those situations.

A payment from a liability insurance policy to someone injured in a crash comes with strings attached. Victims receive money for their injuries and losses in a car accident, but in return they must give up their legal rights to seek any further compensation from the insurance company and the person/entity the company insures.

In the legal profession, we refer to this transaction—payment of money in exchange for an accident victim giving up legal rights—as a settlement. Lawyers and insurance companies always put settlements in writing, in a document called a settlement agreement (or sometimes a release and covenant not to sue).

What Determines the Value of Settlements

Three principal factors contribute to the value of a car accident settlement: the nature of the injuries and losses, the amount of money available to pay for them, and the skill and preparation of the parties who negotiate the settlement agreement. Let’s take a look at each of them.

Nature of Injury and Losses

It probably comes as no surprise that one of the biggest factors in determining how much money a settlement involves consists of how much harm the person receiving the payment suffered in a car crash.

That is because the amount of damages a person suffers in a preventable collision focuses principally on the out-of-pocket costs to that person (known as economic damages) and the degree of physical pain and mental suffering the person endured (known as non-economic damages). The worse or more widespread the injuries and losses from an accident, the greater the amount of money needed to make up for them.

Economic damages compensate an accident victim for just about any out-of-pocket costs you can imagine that flows from crash-related injuries and losses. Typically, they include:

  • Medical costs associated with the injury, ranging from emergency treatment to long-term therapy, and everything in-between. The cost of prescription and over-the-counter medicine, medical devices (like walkers and wheelchairs), and any doctor or healthcare treatments, all figure into this calculation.
  • Lost wages, both past and future, flowing from the injury. Car accident victims often need to take weeks or months off from work to heal. Some may never return to work in their former capacities because crash injuries left them with permanent disabilities. The difference between what a person would have earned if the accident had not happened, and the person’s income in light of the accident, constitutes lost wages that the person can recover as damages.
  • Services the accident victim needs as a replacement for his or her own labor. Injuries from a crash can prevent a person from taking care of day-to-day needs, like shopping, caring for children, and keeping house. The damages a person might recover for car accident injuries can include the cost of paying someone else to take care of those needs.
  • Property repair andreplacement costs when an accident damages or destroys personal property.

Non-economic damages compensate a person for the harms that flow from a car crash that do not have direct, out-of-pocket costs associated with them, but which nevertheless harm the victim’s quality of life. These include:

  • Pain and suffering inflicted by an accident injury, including physical discomfort and mental anguish.
  • Harm to personal relationships that flow from an injury, such as the inability to be intimate with a spouse, or losing friendships or family relationships because of the strain of recovery.
  • Loss of life enjoyment due to the disabilities or impairments of a car crash injury, such as when a person can no longer pursue a hobby or sport because of an injury.

From the lists above, you can see that the worse and more widespread an injury is, the greater the overall impact it will have on each of the categories of damages potentially recoverable. In other words, as a general matter, the size of a settlement for suffering a spinal cord injury that causes permanent paralysis will exceed the amount of a settlement for a broken leg that will heal with appropriate medical treatment and therapy.

Financial Resources Available to Pay Damages

The next factor that determines the size of a car accident settlement is the amount of money available to pay it. By this, we mean that car crash victims often face a practical reality that although their injuries and losses add up to an amount of money they should receive, the money available to pay them may limit what they can receive.

Here is what we mean.

Say you get hurt in an accident caused by the driver of a commercial delivery vehicle. The driver’s employer, a major national retailer, carries liability insurance of up to $2 million per accident. In that case, barring you suffering catastrophic injuries, the insurance policy will likely cover your injuries and losses in full, or pretty close to it.

Now imagine you get hurt in an accident caused by the driver of a passenger car who has no savings and carries the absolute minimum amount of liability insurance allowed under state law (say, $25,000). In that case, unless you have suffered little more than minor injuries, odds are the at-fault driver’s insurance policy will not cover all of your expenses.

Two similar accidents, two very different outcomes. This is why it is so important for Tri-State-area motor vehicle crash victims to hire an experienced car accident injury attorney to represent them. One of the most important jobs of any attorney who represents car accident victims is to identify all parties who may have potential legal liability for a person’s injuries and losses.

Many (though not all) accidents result from the poor decisions or reckless actions of more than a single person. Each of those parties represents a potential source of payment for the victim’s injuries. The lawyer who can identify them gives the client the best possible chance of recovering the maximum compensation available.

Skill and Preparation

Top 100 National Trial LawyersThe third factor that affects the size of a car accident settlement is the skill and preparation of the lawyer you hire to help you negotiate it.

Here, we must pause to say that you should always hire an experienced car accident injury lawyer after you get hurt in a crash. Some people think they can do without a lawyer and simply negotiate with insurance companies and defense attorneys on their own. That is, in our experience, not in your best interest.

Insurance adjusters and defense lawyers negotiate settlements for a living. They deploy every legal angle and negotiating tactic available to keep the amount of money their client has to pay to an accident victim to an absolute minimum. The only reliable way to push back against those tactics is to have an experienced lawyer who also effectively negotiates settlements, someone whose only goal is to get you the most money possible.

Not just any lawyer, either. Accident victims need skilled, well-prepared car accident injury lawyers representing them. Getting the most money from a car accident settlement involves knowing the facts of an accident and a client’s injuries inside and out, and having the training and resources to use those facts to push insurance companies and defense lawyers to agree to the maximum payment possible.

Another aspect of achieving the best possible settlement involves the victim’s attorney’s reputation. Victims benefit from hiring an attorney known as a fearless trial lawyer; someone who will gladly take a case to court and present it to a judge and jury if that’s what it takes to get the most money for a client.

Calculating Your Damages

Taking all of the factors above into account, an accident victim can usually get a rough sense of what to expect from a settlement by sitting down with an experienced car accident injury lawyer to review the facts.

Here is a review of the information it helps to compile before you meet with a lawyer for a free case evaluation:

  • Expense documentation. Keep a file of all expenses you face—whether or not you have paid them—as a result of a car accident injury. This should include all insurance documentation, medical bills, invoices for services, and pay stubs from your job (to help show how much you would have earned if you had not gotten hurt in a car crash). Keep receipts for even the most minor expenses – they add up!
  • Any communications from a liability insurance company. You may hear from the at-fault party’s insurance company. Do not accept any settlement offer that insurance company makes to you without first speaking with an attorney. Any offer you receive out-of-the-blue is virtually guaranteed to be for far less money than you deserve. Keep any written communication you receive from someone else’s insurance company in its own file, and forward it along to your attorney right away.
  • Diaries and journals. One challenge of calculating the appropriate amount of a settlement is putting a dollar-value on pain and suffering and other non-economic damages. It can help your lawyer to have some record of the ways an injury has impacted your life. If you keep a journal or diary, then take care to record how the injury has changed your day-to-day.
  • Contact information for other parties and witnesses. If you can, obtain the contact information for anyone involved in the car crash, or anyone who witnessed it. This saves an attorney time and effort in tracking down individuals who can speak to the causes and outcomes of the crash.

With the help of the information above, a lawyer can usually come up with a rough estimate of how much you should receive in a car accident settlement, and how much of that amount you have a hope of actually receiving. Keep in mind, however, that at the early stages of a case, a lawyer’s tally represents only a rough estimate. With hard work, your attorney may find additional sources of payment, or uncover additional facts that increase the value of what you ought to receive.

Seek Legal Help Right Away After a Car Accident

Do not wait to seek help from an experienced car accident injury attorney after a crash upends your life. The sooner you and a lawyer begin working together, the better your chances of recovering every dollar you deserve in a car accident settlement. Conversely, with every day that passes without a lawyer serving your interests, the more difficult it can become to track down evidence and to prove the amount of money you should get for your injuries and losses.

Contact an experienced, resourceful car accident injury attorney today for a free case evaluation that helps to put a value on your car accident claim.

Personal Injury Law