FAQ: “How are car accident settlements calculated?”

If you’re looking for an answer to the question “how are car accident settlements calculated?,” there are 2 things you need to know right away.

One: there is no single identifiable formula for how car accident* settlements are calculated. It depends on a lot of factors, including:

  • Who was injured, and how badly;
  • How those injuries affected the person;
  • The medical bills and damages;
  • The costs of future medical care, assistance, and general life changes;
  • The causes of the crash;
  • And where and when it happened.

Two: all of these factors could be irrelevant if the person who caused the crash doesn’t have enough insurance, or can’t pay for the settlement.

Let’s look at these factors in greater depth.

Factors in calculating a car crash settlement

In free consultations, we are often asked some version of “how are car accident settlements calculated?”*

It is a great question, with a complicated answer. We always want people to understand that there is no single formula. The closest you will get is an educated guess from an experienced personal injury lawyer who reviews the records and considers all of the factors below – and more.

Here are some of the factors we start with in calculating personal injury case value for a car crash claim.

Who was injured in the crash.

Your instinct might be to say, “It doesn’t matter WHO was injured! That shouldn’t change the value!” For the most part, that’s true. But one of the factors in assessing case value is missed work, and how it affected the injured person’s household.

For example, if a single mother of 3 worked full-time as a nurse practitioner, and injuries from a car crash kept her out of work for a year, the economic cost would be enormous. The value of her claim could be greater than a retired person with the same injures, because she lost more income, and had more expenses.

An injured person with a full-time, high-wage job would have a larger claim for lost wages than a retired person.

The type and severity of the crash injuries. 

Using the same example of the nurse practitioner: if her injuries included a fractured right ankle, she might be able to use crutches to get around, and get back to work after a few weeks.

But if her injuries included a head injury, then she may be out of work for a very long time. A traumatic brain injury is a more severe injury, and in some cases, a permanent, serious and debilitating injury.

How those injuries affected a person’s life. 

Sticking with our nurse practitioner, car crash injuries would have a huge affect on her life. There would be a lot of economic damages— like her medical bills, the cost of transportation, additional childcare, lost wages.

The medical bills and damages. 

If there was a formula for calculating the value of a car crash settlement, it would probably start with the medical bills. (Also, you should know that most health insurance companies require you to reimburse them out of any settlement or trial verdict in your injury case.)

These hard costs give us a starting point for understanding the value of a car crash claim. But, there are damages far and beyond medical bills.

Life changes after a crash.

While medical bills are a starting point, there are so many more needs considered in calculating a value of a car crash case.

For example, do the injuries prevent a person from their prior activities and passions? In addition to physical injuries, were emotional injuries? Crashes can be very traumatic experiences. Loss of enjoyment, ongoing pain and suffering and many other life changes can be considered.

People are often surprised at how a car crash affects not only their body and health, but also their work, home and family time.

The direct – and indirect – causes of the crash.

A direct cause would be a semi-truck driver running and red light and striking your car in the intersection.

An indirect cause would be that you had pulled your car into the intersection. The semi-truck driver’s  insurance company may say that you share responsibility for failing to prevent the collision; they will try to factor this indirect cause of the crash into your claim.

Crash location, investigation, and documentation.

Crash location matters because it affects things like which police department responds, and how fast injured people get emergency medical treatment. It also affects where and when you can file a lawsuit.

Additionally, it can be much harder to prove what happened and who is at fault if a crash isn’t investigated and documented as soon as possible.

It may not matter how car accident settlements calculated.

An experienced injury lawyer may be able to give you an idea of the value of your case, based on all the above info, after reviewing records and reports.

But, it will not matter if there is not enough insurance.

We may review all of the factors and add up all the numbers and decide that a good settlement for your case would be $400,000.00.

If the person who caused the crash only has $100,000 worth of insurance, then that is the maximum amount we can get from their insurance company.

You may be relying on your insurance to help cover bills after a crash. See: How to read your car insurance policy

Of course, we would seek out other options – like any other liable parties, and your own car insurance coverage.

The value of your claim might still be more than you can possibly recover. Your lawyer’s office should help negotiate with the insurance companies and medical care providers to make sure you still get the best possible result.


* Injured people who contact us for a free consultation often ask this question using the word “accident.”
I often tell them – and you – that it was no “accident”: most car crashes are predictable, and preventable. Accident absolves drivers of their bad choices. We ask you to consider using “crash” instead of “accident”.
– Attorney Kevin Coluccio 

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