How Are Car Crash Settlements Calculated?

If you’ve been involved in a car accident that resulted from someone else’s mistake, then you’re probably wondering how much money you can expect to receive for the damages, or losses, you’ve experienced. Insurance companies perform some fairly complex calculations when determining how much they’ll offer to injury victims. The following is a look at how those calculations take place.

The attorneys with Jones Law Group will be ready to help if you’ve been hurt in a car accident caused by the negligence of another party. We’ll fight for your rights at every turn, and do all we can to make sure you obtain every penny of compensation you deserve. Give us a call at (727) 571-1333 or contact us online for a free case review.

What Factors Affect Settlement Value?

As you might expect, there are a lot of different factors that go into calculating how much an insurance company will offer. There are some instances where insurers will try to play certain kinds of tricks in order to reduce a settlement, such as claiming an accident victim wasn’t actually injured in the wreck, but due to a pre-existing condition.

Dirty tricks aside, insurance companies will usually include the total cost of all injuries and property damage when calculating a settlement. There are a lot of details that will need to be considered, such as the original value of the vehicle, how much it has depreciated, mileage and more.

It can be harder to calculate injuries, however. After all, there’s no “Kelley Blue Book” value for something like a broken arm or a punctured lung. Also, different people suffer from injuries in different ways. A professional athlete who’s injured in a car accident will have different financial impacts than someone who is retired. They will also experience issues such as emotional trauma, as well as pain and suffering, in different ways.

Insurers take these and other factors into account when determining how much they will play an accident victim.

How Does the Insurance Company Decide the Value of Your Settlement?

There are some instances where it will be fairly straightforward to calculate a settlement offer. The insurer will just add the medical bills and repair bills. But when a case is more complex, such as when a victim is claiming pain and suffering damages and needs a vehicle replacement, insurers will use other tools, such as the multiplier method. The reason is that victims claiming these other types of damages will be seeking additional compensation.

You’ll learn more about the multiplier method, as well as another type of calculation known as the “damages formula,” below.

How Does Your Attorney Decide How Much to Counteroffer?

If you receive an offer from an insurance company you feel isn’t high enough (chances are this is exactly what will happen), your attorney will make a counteroffer. The attorneys with Jones Law Group have a great deal of experience in calculating the value of a claim, and will take a great deal of the guesswork out of how much our clients should receive.

But in order to have the best chance of success in maximizing your compensation, your attorney will have to make the strongest case possible on your behalf. That means producing the evidence needed to prove you deserve more compensation than the insurer is offering.

Once your attorney determines how much your case is worth, the firm will then send a letter to the insurance company. This will show you don’t accept the offer that the company has made, and you’re willing to fight for what’s right.

Are the Multiplier Method and Damage Formulas Still Used?

Attorneys and insurance companies typically use the multiplier method in order to calculate damages. These calculations can sometimes involve computer algorithms, so you know they’re complex.

In a nutshell, however, the multiplier method works something like this:

• You’re hurt in an accident and you have $10,00 in medical bills. Your actual damages will, of course, very likely be much higher. We use these figures for simplicity’s sake.
• Using that simple scenario, your damages are $10,000. Your attorney will then add a multiplier, typically a whole number between 1-5, when determining how much to demand from the insurer. Let’s say the multiplier in this instance is 2. The attorney would ask for double the amount of your damages, or $20,000.
• The amount of the multiplier will typically fluctuate depending on how badly you’ve been hurt, as well as other circumstances. If your injuries are relatively minor, then the multiplier will probably be 1 or 2. If you’ve suffered a life-altering, permanent injury, the multiplier will more than likely be 5 – in some instances, even higher.

This is, of course, a very basic scenario. There are a lot of other factors your attorney will take into consideration. These include pain and suffering, emotional trauma and others.

Insurers and attorneys will sometimes use the “damage formula” when making an offer. This involves medical bills as well as pain and suffering, emotional trauma, permanent disability and others. They will then multiply that amount by between 1.5 to 5 or more.

Factors that go into how your damages will be calculated include the amount of pain you’ve experienced, the degree of medical treatment needed, the length of your recovery period, and many, many others. Your attorney can give you an accurate picture of what your specific damages will likely be.

Problems with Settlement Calculators

People who are hurt in an accident obviously want to know how much money to expect. In many instances, they’ll use online settlement calculators in order to try to get an idea. But they aren’t reliable, because they don’t take the whole picture into consideration.

For example, two people could have the exact same injury, but the value of their claims could be vastly different. One person will probably respond to treatment differently than the other, and will recover on a different schedule.

Are They Accurate?

Calculators really don’t take variables like this into account. They will ask you to enter a number and then spit out an amount. But there’s a very good chance you’ll actually deserve much more than that amount reflects.

Talk to a Car Accident Attorney Today

Please don’t make a decision to accept an insurance company settlement offer based on that figure alone. Always talk to an experienced attorney first. It could make the difference between getting what you deserve and a lifetime of financial misery.

Get in touch with the Jones Law Group instead. We’re not one of those “personal injury settlement mills.” Those firms are only interested in making a profit – not getting their clients what they truly deserve.

We’ll work passionately to do just that – while providing a level of service you can’t get from a mill. Use our online form or call (727) 571-1333 for a free consultation.