Valuing Car Accident Settlements In 2024

If you've been injured in a car accident, pursuing compensation for your expenses and injuries can be stressful. Insurance adjusters are quick to make settlement offers that promise a speedy resolution of outstanding medical bills and other expenses. Since typical car accident settlement amounts vary widely, this article will help you understand how insurers determine the value of car accident injury claims.

How Much Are Most Car Accident Settlements?

Millions of Americans are injured or killed in car accidents each year. According to data from the National Safety Council, 5.4 million people suffered injuries requiring medical care in 2019. Another 46,980 were killed. Most auto accidents are minor, causing minimal injuries. Although some statistics place the average car accident injury settlement between $20,000 and $25,000, car accident settlements are as unique as the accidents themselves.

Insurance adjusters and attorneys consider many factors when negotiating a settlement package after a car accident. Determining what is fair and justified involves considering each person's injuries, the value of vehicle and property damage, state liability and insurance laws, evidentiary issues and the circumstances of the accident. Want to know what your case is worth? Fill out the form on this page to get started.

Liability and Coverage Affect Car Accident Settlement Offers

When one person is clearly liable for a crash, the insurer of the at-fault driver typically proposes a lump sum payment to cover all claims for injury and damage relating to the accident. If the injured parties accept the offer, they give up their rights to make further claims or file a lawsuit and the case is resolved. However, many car accidents are not so straightforward.

No-Fault vs. Liability Insurance Coverage

Most states require drivers to carry liability insurance policies of at least minimum amounts. The at-fault party's insurance carrier is financially responsible for accident-related injuries and damage. Victims appeal to the liable driver's insurance and negotiate a settlement that fairly compensates them for their injuries, property damage and other losses, up to the limits of the policy. They can sue the responsible parties if their damages exceed the policy.

However, eighteen states require drivers to purchase "no-fault" personal injury protection insurance (PIP) instead of liability coverage. This type of policy pays for the insured driver and their passengers’ medical expenses and loss of income in any covered accident, regardless of fault, minus the deductible and up to the policy limits. Victims negotiate a settlement with their own insurer and are generally prevented from suing at-fault drivers.

Laws in both types of states require that insurance companies make and negotiate settlements in "good faith." In no-fault law states, insurers often follow scheduled guidelines for determining settlement offers since victims can only sue in cases of very severe injuries. In states without no-fault laws, insurers must consider how much a jury would likely award the victim as part of their calculations. This can increase the value of a settlement offer dramatically.

Shared Liability

In states that do not require no-fault insurance, insurers may try to contest liability for the accident and place the blame on the victims or other drivers. They may refuse to make a settlement offer or reduce the offered amount if fault for the accident is questionable or shared. State laws determine whether and how an injured party who shares fault for the occurrence can recover compensation.

• Contributory Negligence: In these states, if a driver is even the slightest bit at fault for a collision, they cannot collect any compensation from the party who was mostly to blame. Washington, D.C., Alabama, Maryland, North Carolina and Virginia follow this rule.

• Pure Comparative Negligence: In states following this rule, an injured person may pursue compensation from another party for their injuries regardless of their own fault in the accident. The total amount they are awarded by a judge or jury will be reduced by their percentage of fault. For example, a driver who was 75% responsible for a crash could pursue claims against other parties, but they would only receive 25% of the total amount awarded by a court or jury. Nearly one-third of states follow this rule, including New York and California.

• Modified Comparative Negligence: The majority of states allow a driver to pursue a claim for compensation as long as they are not equally or more responsible (50% or 51% responsible) for the occurrence. Any award they receive will be reduced based on their share of the fault.

How Insurers Calculate a Car Accident Settlement Offer

Most car accident injury cases are settled outside of court. Insurers generally want to avoid the cost of a trial and the chances of a high jury verdict. Victims often want to avoid the time, expense and uncertainty of a trial. Insurance companies determine how much to offer by considering many factors, including:

• Severity of Injuries: Injuries that are permanent, severe or gruesome usually warrant higher settlement offers.

• Economic Losses: Insurers consider medical bills, lost wages, childcare expenses, vehicle and property damage and all other monetary costs related to the accident, although very high expenses do not automatically lead to high offers.

• Long-Term Economic Impact: Claims involving a reduction in future earning capacity, permanent disability, loss of future opportunities and other long-term losses may lead to higher settlements.

• Pain and Suffering. Injuries that cause intense or protracted pain and suffering, such as burns, spinal injuries, broken bones and organ damage, may increase a settlement value.

• Circumstances of the Accident: Sympathetic jurors often award high verdicts in car accident cases involving drunk driving or road rage, which may increase an insurer's desire to settle before trial.

• Policy Limits: Insurers can only offer the amounts of the insured's policy, even if the damages exceed their coverage.

One good way to estimate a fair settlement amount for your claim is to compare your situation to cases involving similar injuries in your local area. The same injury in one state or county could be valued very differently in another. Reviewing recent, similar car accident settlement examples can help you get a sense of the likely settlement value of your claim.

Unfortunately, settlements are often confidential, so this information may not be easily available to the public. Experienced car accident attorneys have access to jury verdict reports, insurance settlement data and their own prior case results. They can use this information to estimate the value of your case and negotiate the best possible settlement with insurance adjusters and attorneys.

Resolving Your Car Accident Claim

If you've been injured in a car accident and don't believe the compensation you are offered is fair, it's a good idea to consult a car accident lawyer. Curious what your case is worth? Fill out the form on this page today. An attorney can help you prepare a comprehensive, well-documented settlement demand and negotiate with the insurance company for the fair value of the claim or pursue your claim in court.