Car Accidents: What Is the Typical Settlement You Can Expect?

by | Sep 8, 2023 | Financial Featured

When a person asks how much they will get in a car accident settlement, attorneys cannot definitively answer this question. Many factors play a role in how much a person can expect to receive, and no two accidents are identical. The settlement is based in large part on the unique factors of their accident.

The insurance company for the responsible party takes into account the severity of the victim’s injuries. They look at how much damage every vehicle sustained and whether there was damage to other property. Furthermore, the number of victims in the accident plays a role in the settlement amount. However, a car accident lawyer might choose to share general information with a client.

Average Settlements

The average settlement for car accidents in 2020 ranged from $20,000 to $25,000. The Insurance Information Institute reported the average settlement amount for injury cases was $20,235, and the average property damage settlement was $4,711. Martindale-Nolo came up with similar numbers, reporting the average settlement was $23,900. However, this takes into account extremely large settlements, which are rare. Most people can expect to receive less than $10,000 when all is said and done.

Calculating a Car Accident Settlement

The severity of the accident, any property damage, and the injuries dictate how much a person will receive in a car accident settlement. Someone who is in a minor fender bender and has no injuries, for example, will receive enough money to fix the vehicle, so the settlement amount won’t be as large. It will typically be restricted to the actual property damage amount, although there are always exceptions.

A person who is severely injured, in contrast, should receive compensation for their medical bills, lost wages, pain and suffering, emotional distress, and more. A person who is confined to a wheelchair, for instance, may not be able to clean, drive themselves to medical appointments, and carry out other basic tasks. If they must hire someone to take on these things until they are able to do so again, they may request compensation for these expenses because they are related to the accident.

Another factor that plays a role in the settlement a person receives is the insurance coverage of the responsible party. Any victims of the accident will only be covered up to the limits of this policy. Furthermore, fault may play a role in car accident settlements, depending on the state where the accident took place.

Understanding Car Accident Settlements

When a person causes a car accident in most states, the state holds them responsible for the accident and will make them pay for any damages to the victim. The driver won’t be expected to pay the victim. Their insurance company does so on their behalf.

Once the victim makes a claim, the insurance company will probably offer a settlement. This lump sum payment is provided with the understanding the victim cannot make future claims for the same accident. When a victim accepts this settlement, the claim is resolved and no further action is taken. However, many victims choose not to accept this settlement as they believe it isn’t fair compensation for what they have suffered. They may then turn to an attorney for help.

Martindale-Nolo reports most car accident claims are resolved through a settlement. They never make it to court. However, negotiations may occur to reach a settlement both parties feel is acceptable, and the attorney negotiates on behalf of the victim in these situations.

The Time Frame for Settling a Car Accident Claim

Victims may want to know how long it will take to settle their claim. This process does not happen overnight. Many victims find their claim is resolved in six months or fewer. Other men and women discover this claim takes much longer. Thanks to the extended time needed to resolve some claims, the average time for victims to receive a settlement is now 10.7 months.

Insurance Coverage

Most states require drivers to have liability insurance at a minimum. This insurance protects others on the road if the insured party causes an accident. However, the insurer must only pay up to the policy limits. Anything above that becomes the responsibility of the driver who caused the accident. The injured party may choose to sue the responsible for these excess expenses, but they should not expect to receive the funds. The driver might lack the assets needed to cover this amount.

Determining Liability

When one person is clearly responsible for an accident, the resulting settlement may be larger. The insurer recognizes who is at fault and accepts responsibility for their actions. They want to avoid a lawsuit and will provide a fair settlement to do so.

When there is doubt as to who caused the accident, the insurer may offer a lower settlement or none at all. In addition, if the victim had a role in the accident, this may drastically affect the compensation they receive. Each state determines this, so a person should speak to an accident attorney in the state where the collision occurred.

The Severity of the Injuries

Individuals who are not injured in a car accident receive a much lower settlement than those who do sustain injuries. This is to be expected, as the injured party has expenses related to the accident that must be covered, and these expenses extend far beyond any medical bills they incur while being treated for the injuries. Lost wages will also be covered, along with many other things. One thing insurers look at when calculating a settlement following a car accident is the time it will take for the victim to recover from the injuries. Sadly, some people never fully recover, and the insurer will take that into consideration as well.

The goal of a car accident settlement is to make the victim whole for any losses they incurred as a result of this accident. As previously mentioned, these expenses extend far beyond actual medical bills or property damage. An experienced attorney will request compensation for all losses, including those a victim might overlook unintentionally. For this reason alone, any person injured in a car accident should speak to an attorney. Doing so will ensure they receive fair treatment as the settlement process moves forward.

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