How Much Should You Settle for in a Car Accident?

How Much Should You Settle for in a Car Accident?
car accident attorney after car accident settlement

We can be sure of uncertainty and frustration following an automobile accident.

The best answer to “How much should I settle for?” is always: “Don’t settle for anything less than what is possible.” The circumstances of each accident will vary, auto insurance laws are state-specific and multi-faceted, injuries can be either straightforward or complex, and when all is said and done, damages can range from a few thousand dollars to over $1 million.

Making the best decision requires:

  • A detailed and clear understanding of all losses
  • Understanding a victim’s legal rights to compensation
  • Knowing what if any, insurance coverage is possible

A car accident attorney can help an injured person determine how much compensation they deserve, the possible sources, and the best estimate of final settlement amounts.

Factors That Determine Your Settlement After a Car Accident

Placing a value on a car accident settlement may be based on factors such as the severity of the accident and the complexity of medical treatment, and the actual amount of available funds.

As an example whiplash is a fairly common car accident injury, it is usually self-limiting and relatively minor compared to a spinal cord injury resulting in paralysis. In terms of monetary value, whiplash may recover a few thousand dollars, while permanent confinement to a wheelchair could recover millions. It is rarely feasible to attempt to maximize a settlement for a car accident without the help and guidance of a personal injury lawyer.

Property damage

Car accident settlements can vary greatly based upon many factors in addition to medical costs. Property damage can be substantial. Even a simple fender-bender can damage the vehicle’s frame and electrical and mechanical systems.

The impact of even a minor accident can throw a car out of proper alignment, damaging the entire suspension. A photograph does not always tell the whole story. A picture taken at the accident scene will not show these issues. In cases where the car is not totaled, a full diagnostic inspection by a qualified mechanic could prove beneficial.

Loss of income

Lost wages and loss of earning potential /capacity are separate issues entirely. Calculating lost income after an accident is a common task for car accident lawyers. To figure lost wages for hourly workers, multiply the hourly wage times the number of hours missed due to the injury; to figure lost wages for salaried workers, yearly salary can be divided by 2080, then multiplied by the number of hours missed due to the injury

Lost earning capacity, however, is more speculative. This figure is a projected amount an accident victim could have earned but for the injury.

Usually, life planners and financial analysts calculate it using industry standards, as well as:

  • The plaintiff’s educational background
  • The plaintiff’s current line of work
  • Other potential work-skills or certifications
  • The plaintiff’s current salary before the accident
  • The industry-standard rate of pay
  • Opportunities for advancement
  • Any expected raises, bonuses, or commissions
  • Based on the injured person’s age, the length of time they would likely continue to work
  • Inflation

Medical costs - current and expected

Medical costs are ultimately, legally the injured parties’ responsibility. Is it fair for one person to absorb the financial burden of someone else’s negligence? Of course not. But it happens, and many families face mounting medical debt and even possible damage to their good credit rating.

This is one important reason for accident victims and their families to have expert legal advice in navigating the legalities of personal injury law.

The responsible parties’ insurance policies may cover:

  • Physician, hospital, and ambulance charges
  • Physical, occupational, and psychological therapy
  • Necessary medical equipment
  • Diagnostic tests
  • In-home nursing care

Conceptualizing how to adequately compensate someone for non-economic damages is one of the most difficult tasks for litigators, insurance adjusters, judges, and juries alike. Pain and suffering, depression, loss of life’s enjoyment, loss of consortium, stress, and anxiety are intangible emotional losses and they are very real.

Following an accident, many people can experience emotional distress. During the healing process, you may notice increased stress, Post Traumatic Stress Disorder (PTSD), anxiety, depression, anguish, fearfulness, issues with sleep, reoccurring nightmares about the crash, and more Anxiety and Depression Association of America (ADAA)

The emotional burdens of a traumatic accident can sometimes completely alter a family dynamic and forever change the way people interact with others. No one should have to shoulder the cost of such a life-changing event. When a personal injury lawyer advocates for an accident victim, they can help the family show decision-makers exactly how the accident affects daily life.

Punitive and exemplary damages

If the court finds outrageous and reckless conduct the accident caused, it may award punitive damages (sometimes called exemplary damages). When courts order them, the total value of an award can greatly increase.

A judge and jury may award punitive damages to a plaintiff for a defendant’s reckless behavior and Intentional harm. Once again, this is an issue best discussed with an attorney familiar with all issues surrounding a car accident claim.

The Estimated Treatment Costs

Medical care is expensive. Some injuries sustained in an automobile accident may require expensive surgeries, extensive rehabilitation, and quite possibly life-long treatments and in-home care. When deciding on whether to accept an insurance carrier’s financial settlement, the projected costs of treatments and care, length of recovery time, and the impact each injury has on daily living should factor into the equation. Let’s explore some statistics about the most common injuries resulting from car accidents.

Brain injury

The numbers are shocking. According to the Centers for Disease Control and Prevention, only 26 percent of patients with a traumatic brain injury will improve with treatment, 30 percent become worse and 22 percent will succumb to them.

Those living with this condition may face:

  • Attention and memory deficits
  • Problems with balance and coordination
  • Weakness in the arms and legs
  • Hearing and vision difficulties
  • Personality changes
  • Anxiety and depression

The financial challenges of a brain injury can overwhelm you. In-hospital charges alone can reach more than $400,000, and the average rehabilitation charges, per person per day, are almost $1,600.

Spinal cord injury

Vehicle accidents are currently the leading cause of spinal cord injuries (SCI), and the first-year cost of treatment can easily reach $1 million. Ten years after a spinal cord injury, 77 percent of patients are still unemployed. So, based on statistics and national averages in the first ten years following SCI, the average person can expect to lose almost $675,000 in wages and benefits alone. While this amount will not apply to every accident victim, the example shows the importance of thinking long-term.

The realities of a spinal cord injury can include sexual dysfunction, incontinence, and a lifetime of dependence on a wheelchair for mobility. Losing independence is something few people will ever accept without feelings of depression and anxiety.


Fractures resulting from a motor vehicle can have a considerable impact on both finances and daily life in general. Although commonly thought of as “relatively simple” injuries compared to others, they can be painful and expensive nonetheless.

Without the benefit of health insurance, non-surgical treatment and casting for a broken leg can cost almost $2,500, and radiology studies might add $1,000 to that. The treating physician’s fee may approach $1,000. If the break requires surgery one can expect to tack on $17,000 in surgical fees and hospital costs.

Additionally, fractures can result in:

  • Nerve damage
  • Decreased strength
  • Problems with joints
  • The inability to participate in certain activities

Living with the pain associated with a fracture can affect a person’s quality of life, sleep, and mood. None of these are insignificant, or simple.

Disfiguring facial injuries and scars

Acquired facial trauma from an auto accident can lead to permanent or partial disfigurement. Reconstructive surgery is both risky and expensive. In many cases, a person’s face is a vital component of personality and body image. Living with a facial deformity can cause anxiety and depression along with Post Traumatic Stress Disorder,

Internal organ damage and internal bleeding

Often internal injuries are life-threatening and result in long-term complications. Broken ribs can puncture a lung. An accident that crushes the abdomen or chest may damage the heart. Injuries to the kidneys can potentially lead to kidney failure. Life-long dialysis or an organ transplant is possible and expensive.

Every Detail Is Important

Developing a personal injury claim is a multi-faceted and complex undertaking from start to finish. A successful outcome is directly proportional to the personal injury lawyer’s ability to maximize the amount of financial recovery by carefully investigating all available evidence.

Everything counts, including:

  • Pictures of the accident scene
  • Pictures of the property damage
  • Pictures of the injuries
  • Medical records
  • Bills for all accident-related care or services
  • Ambulance bills
  • Treatment plans
  • Diagnostic studies
  • Eyewitness statements
  • Expert witness testimony
  • Cell phone records
  • Police and accident reports
  • Breathalyzer results
  • Copies of any citations issued at the scene
  • Driver’s license numbers
  • Insurance information for the drivers involved
  • Vehicle information, including license plate numbers

The simple truth of the matter is that insurance companies will offer less than a car accident victim probably deserves. Once you accept a settlement from an insurance company you lose any right to ask for additional compensation in the future. A settlement is final.

Moving forward, and before deciding to accept an insurance settlement, think long-term and ask yourself:

  • How many miles a year will I have to travel to access medical care for my injuries?
  • Will I have to use public transportation or a rideshare service because of my injuries?
  • What is the likelihood of developing more medical issues due to my injuries?
  • Am I able to maintain my household responsibilities, or will I require paid services?
  • Will I need help taking care of my children?
  • Will I need to repair or replace my adaptive equipment any time in the future?
  • Will I need to modify my home due to my injuries?
  • Realistically, how long can I care for myself?
  • If I can return to work, will I need more education or training?

Insurance companies, (not even your own) do not have the accident victim’s best interests in mind when making settlement offers. It would be extremely rare for a first settlement dollar amount to be fair compensation. Often adjusters use mathematical formulas and algorithms to determine how much to offer. There is always a human factor that is, all too often, ignored.

A car accident attorney has the experience and resources you need if you or your family must deal with the traumatic consequences of a car accident. They are here to listen, and they are here to help. Don’t settle for anything less than you deserve.