After a car accident, you may have a lot of worries about the compensation you deserve and how much you should settle for. You may have heard stories about insurance companies that clearly took advantage of a car accident victim or who did not provide the compensation that the victim really deserved in any early settlement offers, despite the victim suffering severe injuries.
When should you settle? How do you know how much you really deserve for your car accident injuries?
Initial Settlement Offers: Why You Shouldn’t Take Them
Immediately after a car accident, you may get a call from the insurance company that covers the liable party. The insurance company may indicate a desire to issue a settlement offer: a quick way for you to access some of the funds you may have lost as a result of your car accident injuries.
You have medical bills to pay. You might not have a source of income if you have to miss work because of your injuries. You have very real, immediate financial worries, and an immediate settlement from the insurance company sounds like a great way to move forward with the compensation you deserve.
Unfortunately, insurance companies know all about the immediate financial worries that pop up after an accident. They know that you may need your vehicle back as soon as possible and that you may need to pay bills quickly. In fact, they may hope that you have too many other things to deal with to worry about contacting a lawyer when the insurance company has already presented you with an offer.
It may sound like a reasonable offer. You may even think that the offer will help prepare you to deal with those bills that seem to pile up faster every day. However, in reality, initial settlement offers may not reflect the full compensation you deserve for your injuries. In fact, many insurance companies will issue an offer that reflects only a small percentage of the damages you really deserve for the injuries sustained in a car accident.
Car Insurance Policy Limits (And Insurance Companies That Don’t Want to Meet Them)
Most car insurance policies include clear limits on how much compensation the car insurance company has to provide following an accident, even if the damages to your vehicle or the costs associated with your injuries exceed the coverage offered by those policies.
Policies may differ depending on whether you have suffered injuries in an accident with a private driver, who likely carries only private auto insurance, or a commercial driver, who may have a much higher-value policy.
You may assume that if you suffer serious injuries that lead to treatments that exceed the coverage offered by the bodily injury liability policy, you will receive the maximum compensation offered by the policy limits.
Unfortunately, insurance companies may try to avoid paying out that much compensation whenever possible. Often, insurance companies will force you to go through several rounds of negotiation before you can arrive at a fair agreement regarding the compensation you recover—and it may still not reflect the limits of the policy.
What Does a Fair Settlement Offer Look Like?
To determine whether you have received a fair settlement offer, you need to know how much compensation you deserve after your car accident. Most auto insurance policies break down compensation into two categories: damages to your vehicle, and injuries to your body. In the case of serious bodily injury from a car accident involving your vehicle, you should receive compensation for both.
The compensation you receive for damages to your vehicle should reflect the cost to realistically repair or replace your vehicle. Insurance companies must perform work on the vehicle in an authorized shop that will take care to restore your car to as close to its former glory as possible.
Often, the shop that does the work will give the insurance company an estimate, which the insurance company must then approve for work to begin. If your car is totaled, the insurance company should offer reasonable replacement value for the vehicle.
Calculating the damages you deserve for severe injuries, on the other hand, can grow far more complicated. If you suffer a traumatic brain injury, for example, you may end up out of work for months. If you suffer spinal cord injuries, your medical costs could rise over $1 million in the first year after your accident alone—and you may find yourself facing high, ongoing medical bills for the rest of your life.
Calculating Compensation After a Car Accident
If you suffered serious injuries in a car accident, sit down with an attorney to go over your injuries, your losses, and the extent of your medical costs. Often, a lawyer can help identify the full compensation you deserve.
In most cases, your lawyer will break down the compensation you should expect from car accident injuries—separate from damage to your vehicle—into three categories. While your final settlement will not include a breakdown of the money you have received based on those categories, a look at the different categories of compensation can help both you and your lawyer calculate the compensation you really deserve for your car accident injuries.
Your Medical Costs
Medical bills offer some of the most daunting concerns associated with many car accidents, especially those that result in severe injuries. Even a minor injury in a car accident, like a broken bone, can lead to the need to visit the hospital. You may have to pay for emergency medical transport, usually in an ambulance, along with your emergency room bill. If you have severe injuries, your medical costs may continue to mount.
For example, you may need to contend with the cost of ongoing surgeries and treatments related to your injuries, and you may have physical or occupational therapy to help you recover and cope with new limitations as much as possible.
Your Lost Earnings
Car accident injuries often bring with them an unexpected and unwanted side effect: they can prevent you from working, potentially long-term, as you recover from your injuries. Many people find that the lost earnings from serious car accidents add up fast, leaving them in an even greater financial bind than initially anticipated.
Those lost earnings may only increase if you lose your ability to work in your previous position permanently, due to injuries that will cause severe, lifelong limitations. Talk to your attorney about how to include those lost wages, including lost vacation time you may have used to provide some income during your absence from work, as part of your claim.
Compensation for Pain and Suffering
In addition to the other elements of your claim, your car accident claim may include compensation for pain and suffering. Calculating pain and suffering in a car accident claim can prove tricky, since your medical costs and lost wages may already meet the limits of the compensation offered by the liable driver’s insurance company.
However, you likely did not suffer physical losses alone as part of your car accident, and you may deserve compensation for those other, non-tangible losses as well. Discuss the physical pain, emotional anguish, and other losses you may have dealt with throughout your recovery with your attorney, who can help give you a better idea of how much compensation you can expect for pain and suffering.
Should I Accept a Settlement Offer?
Before accepting a settlement offer, always sit down with an attorney to discuss your injuries, your losses, and the compensation offered by the insurance company. You never have to accept a settlement immediately—and in fact, if the insurance company tries to imply that the offer will leave the table if you take time to consider, it should serve as a red flag that tells you that you need immediate assistance from an experienced car accident lawyer.
Your attorney will help you go over the terms of the settlement offer and determine whether it meets your needs, including your anticipated future needs.
Asking the right questions as you look at a settlement offer, however, can give you a better idea of whether it might reflect your needs.
1. Does the offer fairly cover compensation for your medical costs, including future anticipated medical costs?
Many car accident victims do not know, immediately after the accident, what their future medical bills will look like. Your doctor may offer you an idea of what your eventual recovery will look like, how much you should recover, or even how much mobility or strength you should ultimately regain.
Your doctor may even break down the average cost of treatment associated with those injuries. However, your doctor cannot predict exactly what your road to recovery will look like. You may have setbacks along the way or suffer challenges that increase your medical costs. If you have complications resulting from the medical treatment you received after your accident, it can further increase the financial cost of your recovery as well as your pain and suffering after the accident.
As a result, many lawyers will recommend waiting to finalize your car accident claim until you have a good idea of what your eventual recovery will look like, including how much long-term medical treatment will cost and how much you will ultimately recover. You may then have a better idea of what your medical bills will actually look like. Then, you can determine whether a settlement offer fairly reflects your medical costs after the accident.
2. Does the offer include compensation for your lost wages?
If you only had to miss a couple of days at work because of your car accident injuries, you might not feel the financial strain. Many people also have sick time that will help cover those missing wages. On the other hand, severe car accident injuries can have you out of work for weeks or even months. You may permanently lose the ability to work in your profession. Your lost wages may become much more catastrophic.
The settlement you receive from the auto insurance company should not just include compensation for your medical costs. It should also include compensation for the major financial losses associated with your accident, including the wages you lost due to time off work after your injury. If the settlement offer does not offer compensation for those lost wages, you may need to continue negotiating.
3. What limits does the insurance policy have?
While you deserve fair compensation for your injuries, the insurance policy’s limits may define the compensation you can recover for your injuries. You may need an attorney to look over the terms of the policy and help determine how much compensation you should expect for your injuries, especially if you suffered a catastrophic injury.
An attorney can look over all the elements of the policy, determine what compensation the policy can offer, and give you a better idea of how much you should expect, including when you should accept a settlement offer that seems to reflect the policy limits and when you may need to continue to negotiate or fight in court to get the compensation you deserve.
Keep in mind that many insurance policies offer higher limits than others. Uber and Lyft drivers, for example, have insurance policies that will offer up to $1 million in compensation for damages caused in an accident. Commercial truck drivers also carry high-value insurance policies, which can offer additional compensation and assistance after a serious car accident. As a result, you may recover more compensation from those policies than you can from a minimum liability insurance policy carried by an average driver.
If you suffered serious injuries in a car accident, do not attempt to navigate your car accident claim and your settlement alone. Instead, contact a car accident attorney as soon after your accident as possible to receive comprehensive support with your entire car accident claim.