How Much To Ask for in a Personal Injury Settlement?

Introduction

You know someone else’s actions caused your injuries, and you know you deserve financial compensation. But how much is fair?

Even if you have a ballpark idea how much money will cover your current medical bills, there’s a lot more to determining a fair settlement than that. And the at-fault party’s insurance company is not a reliable source when it comes to calculating what they might owe you (although they’ll try to tell you otherwise).

Figuring out exactly how much to ask for may feel overwhelming. But if you don’t put in the time and effort to make a realistic estimate, you won’t know if the insurance company is lowballing you—and you may end up settling for far less than you need and deserve.

In this article, we’ll break down how settlement demands are calculated in personal injury cases, and what you should ask for. We’ll also explore some of the challenges you might encounter when seeking that full and fair amount. Finally, we’ll round it out by explaining how a personal injury lawyer is your invaluable partner in getting the compensation you deserve.

First Step: Don’t Talk to the Insurance Company Before Talking to an Attorney

Before you even have a chance to talk to a personal injury lawyer and calculate how much money you deserve, you’re likely to hear from the at-fault party’s insurance company. Our advice, always, is to not take this call and wait until you have a chance to receive solid legal advice.

The insurance adjusters and representatives have one job: to close personal injury claims as cheaply as possible. They are trained to speak to you in a friendly way, as if they’re trying to help you quickly get money to cover costs. In reality, they’re trying to save the insurance company time and money.

One tactic insurance adjusters use is to draw you into conversation, hoping you’ll say something that might suggest your injuries aren’t that severe, or even shifts blame away from their client. When they talk to you like a friend, you’re more likely to slip and say something that they can use against you in settlement negotiations (or even to deny your personal injury claim outright).

Because of Texas’ rule of modified comparative fault, taking on any blame for the car crash or other incident can impact how much compensation you’re entitled to. Since the insurance company is likely to low-ball the settlement offer in the first place, we strongly recommend working with an experienced attorney before you engage with anyone who might pay out damages later.

How Damages Help Determine a Fair Settlement for a Car Accident (or Other Personal Injury)

Monetary compensation meant to offset the losses someone sustained due to an injury that wasn’t their fault is called “damages.” In a personal injury case, the injury event might be a car crash, a slip and fall, or a reaction to a defective product.

Damages are owed not just for monetary losses like medical bills and lost wages, but also for your injury’s impact on your quality of life. Typical damages from a car accident and other common personal injuries include:

• Medical expenses
• Lost income
• Pain and suffering
• Mental anguish
• Emotional distress

Damages also refer to the type of financial settlement you’re after. These are categorized as compensatory or non-compensatory. Compensatory damages compensate people for losses, while non-compensatory damages are more about penalizing the at-fault party.

Compensatory Damages

This part of the settlement pays back money you’ve lost and are expected to lose in the future, and addresses how your quality of life has suffered. Compensatory damages are further broken down into economic and non-economic damages.

• Economic damages (also called special damages): These losses have measurable monetary value, such as medical bills, therapies, medications, lost income, funeral and burial costs (if you have a wrongful death claim), and projected costs (if someone needs care for the rest of their life, for example).
• Non-economic damages (also called general damages): These losses are less tangible but just as real. You may be entitled to compensation for pain and suffering, mental anguish, loss of companionship (in the case of wrongful death or a traumatic brain injury, for example), and other ways your life has changed because of the accident.

Non-Compensatory Damages

As mentioned, non-compensatory damages are usually about penalizing the at-fault party and sending a message of serious consequences for whatever they did.

Also called punitive damages or exemplary damages, this kind of settlement money is not commonly awarded. Punitive damages require the at-fault party to have been extremely reckless, such as intentionally creating dangerous conditions (aggressive driving or driving while intoxicated, for example).

Most of the time, the at-fault party’s actions weren’t so extremely reckless and punitive damages won’t be part of the final settlement.

So, How Much Should I Ask for in a Personal Injury Settlement?

It’s impossible to say here, without knowing the specifics of your case, how much to ask for in a personal injury settlement. It’s difficult to even talk about an average personal injury settlement, since results can vary so widely. It all depends on the specifics of your case and even the laws of individual states.

However, we can explain how settlement demands are usually calculated. In every aspect of that determination, the goal of your personal injury attorney is to help you restore your life, as much as possible, to how it was before the accident.

For economic damages, you’ll need to provide substantial documentation of your medical bills and lost wages. Your lawyer also may need to speak with other medical specialists, economists, or life care planners to come up with a realistic estimate for your future medical treatment costs, how long you’ll be out of work, and even how much you might need to spend on household services, assistive technologies, or other expenses as a result of your injury.

For non-economic damages, the amounts will typically (although not always) be proportionate to your economic damages. For example, if your medical costs and lost income amount to less than $1,000 and you can return to “normal” life within a couple of weeks, your pain and suffering damages will be relatively small. However, if you have $50,000 in medical costs and miss several months of work, your pain and suffering damages are likely to be significant.

Most insurance companies use one of two methods to estimate non-economic damages in personal injury settlements:

• The per diem method—a flat daily rate, usually based on your daily wage, applied each day from your initial injury until you reach maximum medical improvement.
• The multiplier method—multiplying your special damages by a certain factor, usually between 1 and 5, based on the severity of your pain and suffering to calculate non-economic damages in personal injury cases.

However, they are likely to use a method and assumptions that underestimate the true nature of your injuries, rather than one that results in a truly fair personal injury settlement.

The best way to demonstrate your pain and suffering, in addition to records of your economic costs, is a regular record of how your life has changed. This could be daily journal entries about physical pain and emotional trauma, or pictures comparing abilities before the accident to inabilities afterward.

Why Should You Avoid Asking for an Unreasonably High Settlement Amount?

When pursuing a settlement, it’s crucial to strike a balance with your initial demand. Asking for an unreasonably high amount can backfire for several reasons.

Immediate Rejection

First and foremost, if your proposed settlement figure is excessively high, it’s likely to be dismissed outright by the opposing party. Defense attorneys and insurance companies are well-versed in negotiations and can quickly spot an unrealistic demand. An initial rejection can stall the negotiation process, delaying the resolution of your claim.

Reduced Negotiation Leverage

Secondly, an exaggerated asking price can weaken your position at the negotiating table. The opposing party may counter with a lowball offer, far less than what you are entitled to receive for your medical costs, ongoing treatment, and other related damages. This move effectively undermines your bargaining power, leaving you with a less favorable outcome.

Setting Realistic Expectations

To optimize your chances of a successful settlement, aim for a range that is reasonable yet slightly above your ideal outcome. Generally, asking for around 75% to 100% higher than what you hope to receive provides room for negotiation while keeping expectations realistic. This strategy demonstrates that you are open to fair negotiations and can expedite the resolution process.

By avoiding an unreasonably high initial settlement amount, you enhance your credibility, maintain stronger negotiation power, and set the stage for a fair and timely agreement.

How is an Appropriate Accident Settlement Calculated?

Calculating an appropriate accident settlement involves assessing various types of damages and utilizing specific methodologies to determine a fair compensation amount. Here’s a step-by-step breakdown:

Evaluate Daily Losses

First, you need to identify and quantify your daily losses, which can encompass:

• Physical pain and suffering
• Emotional distress and anxiety
• Negative impacts on your daily routine and overall life quality

Use the Multiplier Method

The multiplier method is a widely recognized approach to valuing damages in a personal injury case. Here’s how it works:

1. Calculate Special Damages: These are quantifiable expenses, such as:
   • Medical bills
   • Ongoing treatments
   • Physical therapy and nursing care
   • Lost wages and future earning potential
   • Property damage
   • Services required during recovery (e.g., housekeeping, child care)
   • Out-of-pocket costs (medical equipment, medications, transportation)
2. Apply a Multiplier: An insurance adjuster will add these special damages and then multiply the sum by a number typically ranging between 1 and 5. The chosen multiplier depends on the severity of the injuries and their impact on your life. More severe cases receive a higher multiplier.

Consider the Severity

The final settlement amount varies based on the severity of your injury. Significant injuries that cause long-term or permanent damage usually merit higher compensation compared to minor injuries with short-term effects.

Example Calculation: For instance, if your special damages (medical bills, lost wages, etc.) total $10,000 and the severity of the injury results in a multiplier of 3, the calculation would be:

$10,000 (special damages) * 3 (multiplier) = $30,000 (settlement amount)

By meticulously assessing your daily losses and using structured methods like the multiplier approach, you can estimate a fair settlement that reflects the true impact of the accident on your life. Always consider both quantified and non-quantified damages to ensure comprehensive compensation.

What is the Average Payout for a Personal Injury Claim?

When considering the average payout for a personal injury claim, it’s crucial to understand that this number can vary significantly based on several factors.

Generally, the payout often exceeds $60,000. However, this is a broad estimate. The specifics of your case, including the nature and extent of your injuries, play a critical role in determining the final amount you might receive.

Factors Influencing Payouts:

• Severity of Injuries: More severe injuries typically result in higher compensation.
• Medical Costs: The total amount spent on medical treatments impacts your claim.
• Loss of Income: If you miss work due to your injury, lost wages are considered.
• Pain and Suffering: Non-economic damages like pain and emotional distress can also be compensated.

Every personal injury case is unique, so consulting with a legal professional can provide a more accurate estimate tailored to your situation.

How Much Are Most Car Accident Settlements?

Car accident settlements can vary widely, but most range between a few thousand to tens of thousands of dollars. The exact amount often depends on several factors.

Key Factors Influencing Settlement Amounts:

1. Severity of Injuries: Minor injuries might result in smaller settlements, usually in the lower four figures. Serious injuries, on the other hand, can push settlements well into the five-figure range or more.
2. Property Damage: The extent of damage to the vehicle and other property can significantly affect the settlement. Minor fender-benders result in lower settlements, while total losses increase the amount.
3. Medical Expenses: Higher medical costs due to hospital visits, surgeries, or ongoing therapy can lead to larger settlements to cover these expenses.
4. Lost Wages: If the accident affects your ability to work, settlements often include compensation for lost income.
5. Non-Economic Damages: Pain and suffering, emotional distress, and other non-economic factors also impact the settlement amount.

It’s important to note that each case is unique. Consulting with legal professionals can help ensure that all relevant factors are considered to maximize your compensation.

Why Should You Ask for a Higher Amount for Your Personal Injury Settlement?

When negotiating a personal injury settlement, it’s crucial to ask for an amount that’s higher than what you ultimately expect to receive. Here’s why:

Initial Rejections Are Common

Defense attorneys typically reject the first settlement demand. By starting with a higher figure, you leave room for negotiation.

Room for Negotiation

A higher initial demand gives you leverage. It enables you to appear more flexible when you eventually agree to a lower figure that is still fair.

Psychological Advantage

Asking for more initially can create a psychological benchmark. The opposing party might perceive your lower counter-offer as more reasonable once they’ve seen your original high demand.

Accounting for Unknowns

Early in the case, you might not have all the information regarding future medical costs or long-term impact. A higher starting point can help cover unexpected expenses.

Strategies like this are effective in personal injury cases to ensure you secure the compensation you deserve while maintaining room for negotiation.

Which Personal Injury Cases Get the Highest Settlements?

When it comes to personal injury cases, several categories are known for garnering the highest settlements. Here’s a breakdown of the most significant ones:

Tobacco Litigation

Among the most monumental settlements in history are cases against major tobacco companies. For example, one notable lawsuit reached an astonishing $145 billion in settlements. These cases typically involve class-action suits where plaintiffs argue that tobacco companies failed to adequately warn about the dangers of smoking.

Medical Malpractice

Cases of medical malpractice often result in substantial settlements, especially when negligence leads to severe injury or death. Factors influencing the settlement amount include the severity of the injury, the cost of medical care, and the impact on the victim’s quality of life.

Catastrophic Car Accidents

Certain car accident cases, particularly those involving commercial vehicles or drunk drivers, can lead to high settlements. Compensation often covers medical expenses, lost income, and punitive damages, especially if the responsible party’s negligence was egregious.

Defective Products

Lawsuits concerning dangerous or defective products also yield significant settlements. This category includes anything from faulty machinery to unsafe pharmaceuticals. If a product causes harm due to design flaws or inadequate warnings, manufacturers can be held liable for large sums.

Exposure to Hazardous Substances

Cases involving exposure to hazardous substances, such as asbestos or toxic chemicals, often result in hefty settlements. These cases usually entail long-term health implications, including chronic diseases or cancer, which necessitate extensive medical treatment and compensation.

Key Takeaways

• Tobacco lawsuits: Multi-billion dollar settlements due to class-action claims.
• Medical malpractice: High payouts based on injury severity and medical costs.
• Severe car accidents: Large settlements, especially with aggravated negligence.
• Defective products: Significant compensation for injuries caused by dangerous goods.
• Hazardous substances: Substantial payouts for long-term health effects.

Understanding which cases tend to yield the highest settlements can guide individuals in seeking appropriate legal recourse and compensation.

How Insurance Policy Limits Affect Personal Injury Settlements

When dealing with a personal injury claim, understanding insurance policy limits is crucial. These limits essentially cap the amount of compensation an insurance company will pay out under their policy.

What Are Policy Limits?

Insurance policies, whether they’re from major providers like Allstate, State Farm, or Geico, come with predefined coverage limits. These limits define the maximum amount the insurer will pay for a claim.

Impact on Your Settlement

1. Maximum Payout:
   • If your total damages are within these limits, you can potentially recover the full amount from the insurer.
   • However, if your damages exceed these limits, the insurer will not cover the excess, leaving you responsible for the remaining costs.
2. Negotiation Leverage: Knowing the policy limits can help you plan your negotiation strategy. You can present a stronger case to ensure you secure the maximum payout available.
3. Supplemental Claims: In cases where damages exceed policy limits, you may need to look into other avenues for compensation. This could involve pursuing a lawsuit against the at-fault party or seeking additional coverage through your own insurance policies.

Example Scenario

Imagine you have a policy with a limit of $50,000. If your medical expenses and lost wages total $75,000, the insurance will only cover up to $50,000. You would be responsible for the remaining $25,000 unless other arrangements or claims are made.

Understanding these limits helps you better prepare for your financial recovery in the aftermath of an injury. Having a clear view of the insurance landscape can also guide you in making informed decisions about your coverage needs and potential legal actions.

What if the Settlement Amount Doesn’t Cover My Costs?

What do you do if you need and deserve $100,000 in financial compensation, but the at-fault party’s insurance policy will only provide $30,000 in insurance coverage (the minimum liability coverage required in Texas)? Filing a personal injury lawsuit against the at-fault driver and targeting their personal assets may be an option, but if they don’t have $70,000 on hand, you’re not likely to get what you need.

Fortunately, your car accident lawyer will know where else to look for the assistance you deserve, often right within your own auto insurance policies. Some common sources of compensation include:

• Personal injury protection (PIP): Auto policies include this unless you decline it in writing. PIP helps with medical expenses, non-economic costs, and lost wages.
• Uninsured/underinsured coverage (UIM): If the at-fault party does not have insurance, carries too little for your needs, or leaves the scene and can’t be held accountable, this coverage on your policy steps in to help. Like PIP, you should have this unless you’ve specified otherwise.
• Medical payments coverage: This is similar to PIP, though it’s not the default and only covers medical costs for you and your passengers.

Although pursuing these options can add time to your case, it’s often well worth your time to explore them. And, if you’re partnered with an experienced personal injury attorney, much of the legwork and detail will be taken care of for you.

It’s also important to understand that, after your case has been won, your attorney may be able to negotiate with your medical providers and settle your debt for less than what you owe, ideally so you won’t still have to pay out of pocket and can even keep some of your settlement for yourself.

Fighting for fair compensation is about ensuring long-term security and stability for injured people and their families. Our legal team takes that job seriously, and invests time and energy so that you get the compensation you deserve.

RELATED: Will My Settlement Affect My Social Security Payments or Other Government Benefits?

Contact Roberts & Roberts for Help Getting the Settlement You Deserve

We promise to give you and your case full attention when you work with the personal injury lawyers at Roberts & Roberts. Let us put decades of experience to work for you, from determining how much you should demand to negotiating for it aggressively.

You won’t pay anything up front when you hire our law firm. We begin with a free consultation, and only get paid when we secure your settlement or jury award. We can take your call 24/7, and will come to you if you are unable to meet in our offices.

To learn more or set up your initial case evaluation, call (903) 467-5757 or use the contact form on our website today.

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