A car accident is a terrifying experience that can leave you with serious injuries, unable to work, and facing huge medical bills.
If the accident wasn't your fault, you deserve fair compensation. But how much is fair? How do you determine what to ask for in a settlement from the other driver's insurance company?
The truth is, there's no simple answer. Every accident is different. Many factors go into calculating an appropriate settlement amount. However, you can follow some general guidelines to ensure you don't get shortchanged.
An experienced car accident attorney should always determine everything your car accident settlement should cover.
Medical Expenses
If you suffered an injury in the crash, your settlement needs to account for all associated medical costs, including:
- Emergency room visits
- Ambulance fees
- Doctor appointments
- Hospital stays
- Surgeries
- Medications
- Medical equipment like crutches or a wheelchair
- Future medical costs for ongoing treatment or therapy
Keep detailed records and receipts for all your medical expenses. Don't leave anything out - even small copays can add up quickly. The insurance company will scrutinize these costs closely.
Lost Income
Serious injuries may force you to miss work for days, weeks, or even months while you recover. Your settlement should reimburse you for all the income you've lost due to the accident, including:
Regular Pay from Jobs or Self-Employment
The most straightforward component of lost income is your regular income from jobs or self-employment that you missed out on due to your injuries from the car accident.
Whether you work full-time or part-time, are independent contractors or freelancers, or run your own business, you deserve compensation for this lost income.
Document exactly how many work days/hours you had to miss. Calculate the income you might have earned during that period. Provide pay stubs, timesheets, or tax return evidence showing your normal income level before the accident.
Bonuses or Commission Payments You Missed Out On
For many workers, a significant portion of their overall compensation comes from bonuses, commissions, tips, or incentive payments tied to job performance or meeting sales goals. When you miss work due to accident injuries, you also lose out on those potential bonus earnings.
Document any commissions, performance bonuses, or incentive payments you may likely earn over the period you cannot work. If your injuries caused you to miss hitting a major incentive target or sales quota, account for those losses in your claim.
Paid Vacation or Sick Days You Had to Use
After a serious car accident, you may have used up large portions of your paid vacation days or sick leave to recover and receive income while missing work. Don't underestimate the tangible monetary value of those paid days off.
Record exactly how many paid vacation, personal, and sick days you used due to accident injuries. Include those days in your lost income claim, and the at-fault party's insurance should reimburse you for them.
Effectively, your accident drained away the paid leave you had earned. You'll need pay stubs or tax records to document exactly how much income you lost. If you'll be out of work for an extended period, get an estimate of future lost earnings from your employer.
Vehicle Damage
The settlement payment should cover the full cost of repairing or replacing your damaged or totaled vehicle in the wreck.
This includes:
- Repair estimates from auto shops
- Value of your vehicle if it was totaled
- Cover the rental car costs while your vehicle undergoes repairs
The insurance company may send out an adjuster to inspect the vehicle damage. Prepare to negotiate if you disagree with their estimate.
Pain and Suffering
In addition to your economic losses like medical bills and lost income, you deserve compensation for your physical pain, emotional suffering, and general loss of enjoyment of life caused by the accident and injuries. You need an experienced lawyer to put an accurate dollar value on these damages.
Factors that can increase pain and suffering damages include:
Severity of Your Injuries
The more severe your injuries are from the car accident, the higher your pain and suffering damages. Severe injuries like brain trauma, spinal cord injuries, compound fractures, organ damage, etc., are extremely disruptive to your life.
You'll likely experience intense physical pain, emotional distress, and an inability to go about your normal activities and routines. Your quality of life suffers significantly. These types of catastrophic injuries deserve higher compensation for pain and suffering than relatively minor injuries like whiplash or sprains.
Degree of Permanent Disability or Disfigurement
If your car accident injuries have caused permanent disabilities or disfigurements, this hugely affects your lifestyle and self-esteem.
Insurance companies must adequately compensate for permanent disabilities and disfigurements through pain and suffering damages. Payouts should account for your life-long struggles, secondary health impacts, loss of earning potential, and diminished personal relationships.
Length of Time You'll Suffer From Symptoms
For many car accident injuries, symptoms like pain, mobility limitations, cognitive issues, etc., can persist for months, years, or even permanently. The longer you must endure these symptoms and side effects from your injuries, the higher your pain and suffering damages should be.
Chronic pain, mobility impairments, and ongoing rehabilitative treatments place tremendous burdens on your life. You cannot participate in activities you once enjoyed or be confined to your home. Properly value these lasting effects.
Psychological Trauma From the Accident
The trauma of being in a violent car crash can have severe psychological impacts that linger long after physical injuries have healed. Many accident victims suffer from conditions like PTSD, anxiety, depression, panic attacks, and emotional distress.
If you experience any mental health issues, sleep disturbances, or psychological trauma stemming from the car accident, include these in your pain and suffering calculations. You may require counseling, therapy, medications, and other treatments that impact your life.
Effects on Your Relationships and Lifestyle
Car accident injuries can detrimentally affect your closest personal relationships with spouses, partners, family members, and friends in immeasurable ways. You cannot participate in the same activities you once shared with loved ones.
Additionally, serious injuries completely disrupt your overall lifestyle and daily routines. Even simple tasks like cooking, cleaning, bathing, and dressing become painful chores. Serious injuries rob you of your ability to enjoy hobbies, exercise, travel, and social events.
Ensure your pain and suffering settlement demands prioritize giving considerable weight to these profound effects on your closest relationships and overall quality of life. Don't let insurance companies diminish these essential life components.
There are no hard guidelines, but pain and suffering are often calculated as a multiple of your economic damages, perhaps two to five times your out-of-pocket costs.
Overall Settlement Value
To estimate the total settlement value, you'll need to add up all of these components:
Medical expenses + Lost income + Vehicle damage costs + Pain and suffering estimate = Total settlement value
For example, say your accident caused $25,000 in medical bills, $5,000 in lost income, and $10,000 in vehicle damage, and we value your pain and suffering at $100,000 (four times your economic damages). We reasonably calculate your total settlement at $140,000.
Lowball settlement offers from insurance companies are extremely common. They'll likely start much lower than you deserve, maybe 50 percent lower in some cases. This is why it's so important to have documentation backing up the full value of your claim.
This is only an example of how a possible settlement might work, as each situation can result in widely varied amounts. A car accident lawyer cannot know how much your settlement should be without evaluating your losses.
Negotiating Your Settlement
If you negotiate directly with the insurance company, be prepared for an uphill battle. Their adjusters undergo training to minimize payouts as much as possible. Always have your car accident attorney handle negotiations from the start.
Back-Up Every Component of Your Claim With Documentation
The insurance company will scrutinize every aspect of your claim and demand proof for each component. Don't give them any reason to dispute or lowball certain expenses.
Your car accident lawyer can assemble thorough documentation and records to back up your claim, including:
- All medical bills, treatment records, prescriptions, and future care estimates
- Pay stubs, tax forms, and employer statements verifying your lost income amounts
- Repair estimates, photos of vehicle damage, rental car costs, and valuation reports
- Any evidence you have relating to your pain and suffering damages
Organize everything neatly and be prepared to provide immediate supporting documentation whenever asked. The more complete and accurate your documentation is, the stronger your case becomes.
Don't Accept the First Offer. It's Never Their Highest Offer
Insurance companies have a strong incentive to minimize payouts on claims. Their first settlement offers are always intentionally low - sometimes obscenely low. They're hoping you'll jump at the chance to quickly get compensation and leave a lot of money on the table.
No matter how tempting that initial offer might seem, don't accept it. Politely reject it and counter with the full settlement amount you're demanding based on your evidence and calculations. This opens further negotiations as the insurance company must raise its offer.
Be prepared for this negotiation process to take some time. But, an insurance company rarely doesn't increase their settlement offer from their first lowball amount.
Get All Communication From Them in Writing
Throughout the settlement negotiation process, your lawyer can demand that the insurance company provides all communication, offers, and counteroffers in writing. Do not rely on verbal discussions or promises.
Having written documentation protects you legally. It ensures there's a paper trail you can refer back to. It prevents the insurance adjuster from changing their stance or reverting to a previous offer they made.
Don't Give a Recorded Statement Without Your Lawyer Present
Insurance companies will love for you to inadvertently make a statement that downplays your injuries or damages. That's why they often push for recorded statements or interviews early in the process.
However, you are under no obligation to provide a recorded statement to the insurance company, especially before you've fully documented your claim. Anything you say can potentially be used against you to diminish your settlement.
If the adjuster requests a recorded statement, politely refuse. Say you prefer to provide a written account of the accident instead. Tell them to direct all such inquiries to your car accident lawyer.
Be Reasonable but Firm in Your Demands
Negotiating a fair car accident settlement requires maintaining a balance. You want to be reasonable and willing to compromise to a degree, as that's the nature of any negotiation. But you must also stand firm in your demands and not get pushed into an unreasonably low settlement.
Your car accident attorney will back up your settlement amount calculations with hard documentation and facts. Don't let the insurance adjuster casually disregard or lowball important parts of your claim.
Your lawyer will push back firmly whenever the insurer is unreasonable or trying to take advantage. Compromise is possible, but not at the expense of being compensated fairly.
Settlements can take months to finalize. The insurance company may wait to see if your injuries improve. You may need to take them to court if they refuse to offer a fair settlement.
Hire an Experienced Car Accident Lawyer
The car accident settlement process is complicated, especially when recovering from injuries. Having an experienced lawyer on your side can make a huge difference.
An attorney knows all insurance companies' tactics and can effectively counter their lowball offers. They understand how to accurately value pain and suffering claims. A lawyer's representation makes you much more likely to receive a fair and maximized settlement.
Most car accident lawyers work on a contingency basis. You pay nothing unless they win your case. So there's no risk in hiring legal representation - only a high potential upside.
Don't get taken advantage of by insurance giants. If you suffered an injury in a car accident, hire a qualified personal injury lawyer today. Reach out to a trusted law firm near you for your free case evaluation.