Car accident victims frequently face financial strains they did not anticipate and cannot easily meet. Knowing this, liability insurance carriers representing the party at fault for the car accident sometimes reach out to victims to offer them a settlement. But the payments they offer, even if they seem like a lot of money, may not come anywhere close to the amount the victim deserves, or that a skilled lawyer could secure on their behalf.
As lawyers for individuals who suffer injuries and losses in car accidents, we frequently get asked about these settlement offers. Clients want to know: What is a good settlement offer? Is the money an insurance company offered me a fair settlement?
The purpose of this blog post is to explain how we answer those questions. What we tell the individuals who contact us can vary from case to case, but it usually boils down to some version of the discussion below. For more information, contact a personal injury attorney today.
There Is No One-Size-Fits-All Amount.
Let’s make one thing clear right off the bat: the amount of money that makes for a “good” settlement offer varies from case to case.
Why? Every car accident differs. The differences from one accident to the next in the facts and circumstances of what happened, the nature of the victim’s injuries and losses, the legal questions involved, and the financial resources of the at-fault party, make any notion of an average car accident settlement pretty meaningless. A $100,000 settlement offer might prove reasonable in one case, but inadequate in another.
Experienced Car Accident Lawyers Conduct a Three-Pronged Settlement Analysis.
Instead, the analysis of what makes for a good settlement offer generally breaks into three component questions.
1. How much do you deserve to receive?
The first part of analyzing a settlement offer involves figuring out how much money you should receive. In other words, if you consider all the facts of the accident and your injuries, then assume that the other party is 100 percent at fault and has unlimited funds with which to pay you, what amount of money would fully compensate you for the harm you suffered?
In performing that analysis, lawyers break the compensation you deserve into two basic types. First come your economic damages, which consist of the direct financial losses you suffered in the car accident.
These may include, for example:
- The total medical costs (both out-of-pocket and those covered by your insurance) involved in treating the injuries you suffered in the car accident, and any subsequent health complications you suffered or may suffer in the future because of those injuries. These can include costs of emergency care, hospitalization, physical therapy, medication, and medical equipment.
- Any other (non-medical) costs you have incurred, or will reasonably likely incur in the future, as a direct result of the accident or the injuries you sustained. These can include, for example, costs of repairing or replacing damaged property, or of hiring help with day-to-day tasks that you cannot perform because of your injuries.
- The current and future loss of wages and income you have suffered or will suffer because of your car accident-related injuries. Often, these include time missed (or paid time off used) from work while recovering from your injuries, and any expected loss of income due to the limitations your injuries create on your ability to work.
In addition to those financial losses, lawyers will also calculate the value of your non-economic damages.
These consist of all other life challenges and difficulties you have suffered because of your car accident injuries, such as:
- The physical pain you have endured and will likely endure because of your injuries.
- The emotional suffering caused by your injuries, including the psychological impact of living with chronic pain, or of having sustained wounds that leave disfiguring scars.
- The negative impacts on your relationships caused by the car accident and your injuries, including interference with your ability to parent your children, or to share intimacy with a spouse or partner.
- The overall loss of your quality of life resulting from your injuries, such as when an injury prevents you from participating in activities you once enjoyed, or causes you ongoing inconvenience and uncertainty that overshadows your day-to-day life.
In addition to those two categories of injuries, lawyers will also typically assess whether the facts and circumstances of your car accident merit a request for additional compensation, called punitive damages, to reflect the extreme or intentionally harmful nature of the actions that injured you.
Lawyers use various methods of calculating the damages listed above, all to identify one number that represents full compensation for any given car accident victim’s case.
2. How much could you realistically expect to receive if you won a lawsuit against the at-fault party?
The amount you should get for your injuries and losses in a car accident is not always what you could realistically expect if you were to sue the at-fault party and win in court. Most car accident cases face constraints that limit their value, one way or another. A skilled car accident lawyer’s job is to identify those constraints and figure out their potential impact on what constitutes a good settlement.
Here are just some of the typical constraints that impact the value of a car accident claim:
- The at-fault party’s financial resources. Does the at-fault party for your car accident have the financial resources to pay you the full amount you deserve to receive? That is a key question in any settlement analysis. In most car accident cases, the at-fault party carries some amount of liability insurance, but that insurance may not cover your full damages. Unless the at-fault party has other access your lawyer can reach to pay your claim, the insurance limits can act as a cap on the damages you may receive.
- The cost of litigation. At the beginning of your attorney-client relationship, you and your attorney will agree on how to may the attorney and the costs of litigation. Depending on that agreement, you may need to consider the added fees and costs of taking a case through trial when calculating the money that would find its way into your pocket at the end of the day.
3. What are your chances of success, and what are the certainty and finality of a settlement worth to you?
Having figured out what you could realistically expect to receive in the best case trial scenario, the third component of analyzing a settlement involves taking a clear-eyed look at your odds of winning at trial, and being honest with you about the certainty and finality of settling your case instead of fighting it in court.
As for the chances of success, a skilled car accident lawyer can evaluate the strengths and weaknesses of your claim.
This typically involves an evaluation of:
- The availability of evidence and witness testimony to prove your claim.
- Evidence that potentially undermines the strength of your claim.
- Legal complications of your case.
- A lawyer’s gut instinct about how favorably a jury or judge would view your case.
A skilled lawyer can also work with you to help you figure out whether it is worth settling now instead of fighting in court. Everyone differs in this regard. Some of our clients, for instance, want to fight a case to the end and have their day in court. Many others, however, have less taste for the uncertainty of a trial and would take a little less money now. It is truly a matter of personal preference, and ultimately settlement is always your choice. A lawyer’s job is simply to give you the best possible information and guidance to make that decision.
You Cannot Simply Trust an Insurance Company to Make a Good Settlement Offer.
So far, we have talked about how a lawyer approaches the analysis of whether a settlement offer you have received is a good one.
Now, let’s talk about practicalities. If the discussion above seems somewhat complicated, we would understand if you wondered whether it is all worth it. Can you just trust an insurance company to pay you pretty much what you deserve to receive?
Insurance companies do not make money by paying full claims willingly. They turn a profit by holding onto money and paying the least amount possible on every claim. Chances are, if you have received a car accident settlement offer directly from the other driver’s insurance company, what they have put on the table will fall far short of what any lawyer doing the analysis above would consider a good settlement.
The insurance company hopes that you will not do that analysis. Why? Because once you take settlement money from a liability insurance company, you give up your rights, forever, to sue for more. That is why all car accident lawyers will tell you not to agree to a settlement without first talking to an experienced attorney. You have valuable legal rights, and insurance companies want you to relinquish them for as little money as possible.
Instead, Trust a Skilled Car Accident Lawyer to Negotiate a Settlement on Your Behalf.
The best and most reliable way to get the largest settlement possible in your car accident case is to leave settlement negotiations to an experienced attorney who represents your interests, and your interests alone. In most cases, an attorney—having determined the value of your car accident claim—can negotiate on your behalf with the at-fault party’s insurance company and/or defense lawyer. Through these efforts, your lawyer can get you far more money than the defense offered or than you could get on your own.
There are no guarantees, of course. In most instances, however, the settlement offer you have already received is not the best one you can get.
Instead, by investigating your claim, collecting and reviewing evidence, and preparing an effective legal and factual presentation, a lawyer could create leverage that substantially increases the value of your claim in the eyes of the at-fault party and their representatives. By negotiating from that position of strength, often, an attorney can extract a much higher settlement offer from the at-fault party’s insurance company than the one you initially received.
Do Not Worry if You Have Not Received a Settlement Offer.
If you got hurt in an accident that was not your fault, but you have heard nothing from the at-fault party’s insurance company, that is ok. Do not take it as a sign that you have no case. Instead of being proactive about making settlement offers, some insurance companies take the opposite approach and stay silent, hoping that your claim will go away if they do not speak up. Sometimes insurance companies simply do not know that you have a claim, because their policyholder (the driver at-fault for your car accident) never told them what happened.
In either event, an experienced car accident lawyer can help you. It is not unusual for the injured party to get the ball rolling on a car accident claim.
In your case, a lawyer may need to initiate contact with the at-fault party’s insurer or defense lawyer by sending them a demand letter, which explains the basis of your claim and requests payment of the amount of money you deserve. Your lawyer may suggest filing a legal action against the at-fault party or some other approach.
So, if you suffered injuries in a car accident, regardless of whether you have received a settlement offer, make contacting an experienced car accident lawyer in your area your next step. In a free, no-obligation consultation, a lawyer can learn about your accident and injuries, and give you an assessment of your rights and potential options.