Should You Accept a Car Accident Settlement Offer?

After a car accident, victims file claims with either their insurance companies or with the other driver’s insurance company. The hope is to get an acceptable settlement offer. The need to file a legal action won’t occur unless the insurer makes an initial settlement offer that’s too low or denies your claim.

If the initial offer is good enough, you should accept it. There’s no reason to delay your recovery in a personal injury claim if the offer is fair. It’s normal to wonder how to tell if the first offer is a good one and what you should expect from a reasonable settlement offer. If you’re not sure, this is a good time to ask a personal injury lawyer to review your claim and determine if you received a fair settlement.

Car Accident Settlements

Most auto accident cases never see the inside of a courtroom. They get resolved through negotiations between the insurance companies, the victims, and their attorneys, if any. A fair settlement offer should cover the victim’s medical bills and costs, lost wages, and sometimes additional property damage. For minor accidents, a basic settlement offer may be sufficient.

In more serious cases, accident victims can receive a higher settlement. If the victim doesn’t have an attorney, the insurance company may try to “lowball” the settlement amount, keeping the payout low in the hope that an inexperienced victim doesn’t realize they could ask for more compensation.

Whether you consult a car accident attorney or not, understanding the insurance settlement process can help you determine if you’ve received the full value of your insurance claim. Let’s make sure you have a good grasp of what you should be receiving and how to get it.

What Do Car Accident Settlements Include?

After a car accident, the insurance company needs proof of your total damages. The insurer uses whatever information you provide to calculate the value of your claim. The more information you provide, the better your settlement will be. We’ve listed the different types of damages below.

Economic Damages

Medical costs, lost wages, and out-of-pocket repair costs are examples of economic damages. The insurer calculates these from your medical records, tax returns, and other documents.

If you suffer severe injuries that may limit your ability to work, you can claim a loss of earning capacity. Claiming loss of future income may require legal representation.

Non-Economic Damages

In settlement negotiations, non-economic damages refer to the intangible losses suffered by accident victims as a result of the accident. Insurers have methods of calculating chronic physical pain and emotional distress.

Calculating Fair Compensation

The insurance adjuster takes your gross pay and typical weekly hours and calculates your standard weekly or monthly pay. They multiply that by the time you were out of work due to your injuries. Insurance companies calculate medical expenses by adding your medical bills, minus anything covered by your personal health insurance. Fair economic damages should at least equal this figure.

In situations where your injuries require long-term care or physical therapy, you must provide proof that you need additional compensation to cover the necessary care. If this becomes tricky, consider getting some legal assistance.

Here are some of the factors that a settlement may cover:

• Lost income is based on your average weekly income or monthly salary. Sick pay or paid time off may affect the final amount.
• Loss of earning capacity is based on what you might earn at your current job. The court bases your earning potential on an average life span, average work career, and possible job advancements.
• Courts use “multipliers” to determine non-economic damages. The judge or jury takes the sum of your medical treatment and multiplies it by a number from one through five, depending on the severity of your injuries.

Punitive Damages

In most states, plaintiffs cannot request punitive damages as part of the insurance claim. Judges can award them at their discretion, or attorneys may ask the judge to consider punitive damages in a trial. Courts award punitive damages when a defendant’s actions were unusually egregious or malicious.

You may receive punitive damages in DUI cases and wrongful death suits, but they are rare in car accident judgments and settlements. The bar for proving punitive damages should be awarded is much higher than just showing that someone was at fault.

Policy Limits and Accident Settlements

All insurance policies have specific policy limits. These are the maximum insurance coverage for any accident or victim per claim. For instance, auto liability insurance is often displayed as something like 25/50/10. This means that particular policy has a coverage cap of $25,000 per victim, $50,000 total per accident, and $10,000 for property damage.

If the victim’s injuries exceed the policy limits, the victim must find other sources to cover their expenses. This often means suing the other driver.

Get Legal Advice From a Car Accident Lawyer

Every car accident claim is different. To get maximum compensation for your case, speak with a personal injury attorney who can give you advice on the laws in your state and how to best proceed in your personal injury settlement.