Car accidents are unique, which is why every case will vary in outcome and worth. This will fluctuate with time, and depending on the overall severity, the average auto accident settlement is between $20,000 and $25,000 based on 2020 research data.
However, this does not mean a car accident claim is limited to the minimum or maximum average. Here is a look into how claim values are determined and how to maximize an auto accident settlement.
What the Numbers Tell Us About Cases of Car Accidents
Car accident settlement amounts significantly vary because each case is based on the unique factors of the accident. The severity of injuries, costs to repair or replace vehicles and other property, and the number of people injured in the crash all affect compensation. Here is what the data surrounding car accident cases tells us:
- Per the Insurance Information Institute, insurance companies paid out an average of $20,235 in bodily injury claims from auto accidents.
- While the average settlement equated to $23,900 in the study, some claimants received less than $10,000.
- The average compensation for claimants who only filed for property damage and were not injured was $16,700, while the average award for bodily injury was $29,700.
- 98% of claimants recovered compensation through a settlement rather than a court case, eliminating the need to file a personal injury lawsuit.
To maximize a claim, it is advisable to consult with an experienced San Jose car accident lawyer. Working with a dedicated legal team ensures that all losses are accounted for and included in the settlement negotiations.
How Is a Car Accident Settlement Calculated in San Jose, CA?
Car accident settlements in California are determined by factors such as car insurance coverage, medical expenses, legal fees, the severity of the accident, lost wages, property damage, and pain and suffering. Therefore, it’s helpful to understand how these car accident claims are calculated and the factors that influence the final financial award.
Car Insurance
The amount of coverage available under the defendant’s car insurance policy directly impacts potential compensation, because insurance companies are responsible for paying damages resulting from car accidents.
California’s minimum liability insurance requirement is 15/30/5, meaning $15,000 per person for injury or death, $30,000 per accident, and $5,000 for property damage.
While some drivers choose the minimum coverage, carrying additional insurance is often advisable. A defendant with limited property damage coverage of $5,000 will be responsible for paying off any remaining costs, potentially leading to significant financial problems.
Overall Damages
Property damage and the total cost of past, present, and future medical treatment resulting from the crash will make up most of the car accident settlement.
Other potential damages may include lost wages, considering the plaintiff’s age, current income, loss of earnings due to the car crash, and how the injuries will impact potential future earnings.
Non-economic damages, like pain and suffering, emotional trauma, mental and emotional distress, and how the plaintiff’s daily life has been affected may also qualify for compensation.
Severity of Injuries
The severity of injuries will also determine the amount awarded in a personal injury claim, as more serious injuries often result in higher medical bills, consequently contributing to increased compensation.
The level of injury can be broken down into multiple tiers, with the most severe including traumatic brain injuries, spinal cord injuries, permanent disfigurement, or wrongful death.
Injuries that are considered mild to moderate but often require surgical procedures, such as broken bones and lacerations, are within the middle-tier category.
The least severe injuries, such as sprains, strains, and contusions, typically don’t require surgical intervention but can still be compensated in a personal injury case.
Legal Expenses
Attorney fees, court costs, and other expenses related to the claim can also affect compensation.
Depending on the legal contract with the hired car accident lawyer, a client will be billed for an attorney’s services based on a flat fee or hourly rate. Or, the auto accident claim will be reduced by the attorney’s contingency fee that was agreed upon before taking the case.
The billing structure should be discussed and thoroughly understood before agreeing to work with a particular personal injury law firm.
The Multiplier Method
Instead of a universal formula, insurance adjusters often use the multiplier method to estimate claim values during car accident settlement negotiations. In this calculation, the adjuster:
- totals out the claimant’s medical bills related to the accident (often referred to as “special damages”),
- then multiplies this total by a factor (typically between 1 and 5) to estimate the value of harder-to-quantify general damages (like pain and suffering),
- and adds the medical special damages, estimated general damages, and any lost earnings or future lost income to determine an overall estimate of the car accident claim
Example
Medical and dental bills totaled $10,000. The insurance adjuster estimated general damages like pain and suffering to be around $20,000, using a multiplier of 2 ($10,000 x 2). It was also calculated that $5,000 of lost income was amassed due to missing work while recovering from injury.
So, the adjuster’s initial estimate of total damages is $25,000 ($20,000 + $5,000).
However, keep in mind that the insurance company’s first offer is likely to be lower than this estimate, as they typically try to settle for less than what a jury may award in court.
A Key Factor That Can Compromise a Car Accident Case
Car accidents that occur in San Jose are subject to California state laws. Because California is an at-fault state for car accidents, all parties who caused the crash will be liable for damages.
Operating under a fault-based system means that the person or entity at fault for the accident covers the financial costs that resulted from the collision, such as medical bills to recover from injuries. In some cases, multiple parties can be liable, including the plaintiff seeking damages, ultimately affecting compensation.
However, under the comparative fault rule, compensatory damages are still available to the plaintiff but at a reduced rate based on the assigned percentage of fault. For example, if the plaintiff is found 20% at fault, then only 80% of damages will be awarded.
While a plaintiff can share fault and still recover compensation, insurance companies will be adamant about placing as much blame on the plaintiff as possible to reduce their own liability.
How Is Compensation Determined in a Car Accident Claim?
Placing a value on a case is a complex process that requires a thorough review of the following variables:
- Severity of medical condition
- Necessity for long-term medical care
- Time missed from work
- How injuries have affected the quality of life
- Out-of-pocket expenses
Overall losses are categorized into economic damages, non-economic damages, and punitive damages.
Economic Damages
This form of financial loss accounts for current and future medical bills, hospital bills, emergency room services, ambulance rides, lost income, reduced earning capacity, physical therapy, and any anticipated medical expenses for future care.
The cost of medical care, medical equipment, or home renovations to accommodate an injury has the potential to bankrupt car accident victims. These are all monetary expenses and can be recovered through a personal injury claim or car accident lawsuit.
Non-Economic Damages
Auto accident victims are also entitled to compensation for other forms of loss, such as pain and suffering, reduced quality of life, mental anguish, loss of consortium, and, ultimately, the emotional toll the incident caused.
Car accidents that cause physical impairments, disfigurement, scarring, or chronic pain can last forever. While these forms of loss do not hold any financial value, they still deserve compensation.
Punitive Damages
This is awarded in addition to economic and non-economic damages, intended to compensate the plaintiff for the other party’s gross negligence.
Punitive damages are monetary awards given to a plaintiff in a personal injury lawsuit to punish the defendant and deter similar future behavior. It is also referred to as exemplary damages.
How to Effectively Settle a Car Accident Claim
Follow the protocol of what to do after a car accident, then proceed with the following actions to promote a successful outcome for a car accident claim.
1. Seek Immediate Medical Attention and Obtain All Medical Records
Seek immediate medical attention, as some car accident injuries may not be immediately apparent. This helps prevent injuries from becoming permanent or even fatal. Also, provide the treating physician with a detailed description of any pain and symptoms.
After the exam, retain all documentation, including medical records, written diagnoses, and treatment invoices, as these reports are essential to a successful recovery. The more details, the stronger the case.
One of the most concerning aspects of a car accident is often the uncertainty surrounding the extent of injuries.
Never assume that injuries are minor or will heal on their own. An insurance company can use any delay in treatment to argue that the crash did not cause the injuries or do not warrant the requested compensation.
2. Report the Car Accident
California car accident victims must ensure the incident is documented by reporting it to the police, the DMV, and their insurance companies.
Even if no one appears injured, call 911. This will help accurately determine fault and assess the damage. California law requires contacting the California Highway Patrol (CHP) if injuries, fatalities, or property damage exceed $1,000.
The responding officer will interview everyone involved and create a police report, which is crucial evidence in car accident cases. This is especially valuable if the other driver is suspected of driving under the influence or does not have insurance.
Similarly, within 10 days of an accident involving injuries, fatalities, or property damage exceeding $1,000, the event must report it to the California Department of Motor Vehicles (DMV) by completing an SR-1 report.
Regardless of fault, motor vehicle accidents must be reported to the insurance company. The insurance agent can complete the SR-1 report and submit it to the DMV on a client’s behalf.
3. Do NOT Speak to the Other Party’s Insurance + Do NOT Accept the First Offer
Insurance companies often benefit from acting early and making a small but prompt offer to victims in an attempt to reduce future payouts.
While it is important to remain cautious about accepting any initial offers, it is best to avoid speaking with the other party’s insurance company until consulting with a car accident lawyer for advice.
Insurance adjusters are trained to use deceitful tactics, such as convincing victims to accept offers well below the typical car accident settlement mark.
They also utilize misleading phrasing that makes victims’ responses appear doubtful in the severity of injuries or uncertain of which party was actually at fault. This is concerning, as any information shared with the insurance company can significantly harm a car accident case.
A common mistake is accepting an initial offer. This is often a lowball option that does not cover all losses and fails to account for future surgery or ongoing treatment.
Because the full extent of injuries and losses might not be apparent for several months, settling too early prevents victims from seeking compensation for future injury-related costs, leading to out-of-pocket medical expenses.
Do I Need to Hire a Car Accident Lawyer?
Legal representation is not a requirement, but it is a major benefit when trying to obtain a fair settlement in a car accident case.
Contrary to popular belief, an insurance company is not always an ally, and directly dealing with them can significantly hurt case outcomes. Personal injury cases have strict deadlines under California’s statute of limitations, and insurance companies know this.
Therefore, they often employ tactics like delaying reaching a fair resolution with plaintiffs to minimize car accident settlements.
However, working with trusted car accident lawyers protects victims from these methods and alleviates the burden of dealing directly with a difficult insurance company.
Contact the Top San Jose Car Accident Attorneys
Our award-winning law firm, Valley Accident Lawyers, specializes in auto accident cases and maintains a 99% success rate in getting our clients the maximum compensation they deserve.
Industry surveys consistently show that claims settled with an experienced personal injury attorney result in significantly higher compensation than cases without legal representation.
For questions regarding an auto accident settlement or to inquire about our services, please schedule a free consultation.
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