How Are Car Accident Settlements Calculated?

Although you can find all kinds of settlement calculators online, there really is no way to calculate a car accident settlement amount with certainty. Every case is different. They involve different facts, injuries, and people. That means that every settlement is going to be slightly different as well. And location plays a factor—Atlanta car accidents, for example, may result in different settlements than in another part of the country.

An experienced Atlanta car accident lawyer, however, can estimate a rough range of what to expect. This will be based on three main factors categories:

• The amount of property damage
• The financial cost of your injuries
• The personal impact of your injuries on your life

We’ll review each of these below to give you an idea of what you can expect in your own case.

Property Damage

In most car accidents, you will have some damage to your car. Your settlement should include some amount of money for that damage. Usually, this portion of the settlement is relatively easy to estimate because it’s directly tied to the value of your vehicle.

The money that you receive with help from an Atlanta personal injury lawyer should be enough to repair your vehicle. An insurance company will usually contact a repair shop to estimate what the cost of repairs will be and use that number in your settlement amount. If your vehicle is totaled, the money that you receive to fix it may not be enough to buy a new car.

Financial & Personal Cost of Physical Injuries

Physical and mental injuries cause several types of losses, including:

• Medical bills
• Lost wages
• Loss of earning capacity
• Loss of enjoyment of life
• Pain and suffering

These damages can be grouped into two main categories: things with an actual dollar cost (“special damages”), and things that have more of a personal cost, or simply take a toll on your life (“general damages”).

Special Damages

Your medical bills and lost wages are relatively easy to estimate because they are directly tied to a cost to you. They have also already occurred—so they are much more certain. Medical expenses are billed to you or your health insurance company directly.

Lost wages are also generally straightforward. It’s usually easy to calculate this amount because you can, for example, take the hours that you missed work and multiply those hours by your hourly wage to get how much wage loss you have due to the accident.

Because these numbers are often easy to calculate, they are sometimes referred to as “quantifiable” damages or special damages.

General Damages

Some types of damages do not come with a specific number attached. The most common general damage is pain and suffering. Although you cannot put a dollar amount on your pain and suffering, money damages are the only way the law provides to compensate you for this type of loss.

To calculate pain and suffering, an insurance company will often use a “factor” formula. Depending on the severity of the accident, the insurance company will assign your case a factor that is usually between two and five. They use that factor as a multiplier for your medical expenses.

For example, imagine you have $20,000 in medical expenses. They have assigned your case a factor of three. That means that your settlement amount for pain and suffering will be in the range of $60,000. This is a starting point. The overall number is then adjusted up or down from there—these adjustments depend on the unique facts of your case.

Other types of damages, including loss of enjoyment of life and future pain and suffering, have similar factoring approaches. But, these will depend on whether you are expected to make a full recovery or if you have injuries that will affect you for the rest of your life.

Loss of earning capacity is also considered a general damage, but it is based on your wages. It’s lumped in with the general damage category because it’s also somewhat speculative. You often need to guess whether you will be at the same job, whether you would have gotten any bonuses or commission, or whether you would be entitled to additional raises if you had been able to continue working. This type of damage often requires to the use of an expert to estimate what losses to your wages are attributed to your car accident as well. Instead of using a factor, insurance companies will use a more precise, although speculative, calculation for this type of damage.

We Can Help You Calculate Your Settlement

Our attorneys can give you a good idea of what your case is worth by examining all of the facts of your case. We can also let you know what an insurance company is likely to offer. Learn more about what a fair settlement might be for your situation by scheduling a free consultation.