How Much to Ask for in a Personal Injury Settlement?

All personal injury cases are unique, but you should ask for no less than the average based on your situation, which could be anywhere from $3,000 to $10,000 or even as much as millions for catastrophic, permanent injuries.

The defense attorney or insurance company will make a settlement offer. You can accept or reject it.

When Is a Person Considered to Have a Personal Injury?

Personal injury is a type of tort. As a result, a person is considered to have a personal injury if they have suffered harm due to the negligence or recklessness of someone else. For example, you were in a car accident with a driver who was deliberately engaging in aggressive driving tactics and suffered a traumatic brain injury. Had that person been driving in a responsible, careful manner, the accident and your subsequent injuries would not have occurred.

What Is Considered a Fair Personal Injury Settlement?

The extent of your damages and how much you have spent out of pocket determine what constitutes a fair personal injury settlement. For example, if your injuries are minor and temporary, the at-fault party’s insurance company might be able to easily cover the damages. On the other hand, if you have suffered a permanent, disabling injury, you would not want to accept a settlement offer of $5,000. In this situation, a fair settlement would probably be many times more than that amount.

How Much Does the Average Personal Injury Plaintiff Get as a Settlement?

The average personal injury settlement amount is around $53,000. Most injured plaintiffs end up recovering $3,000 to $10,000 for their damages. However, this only accounts for minor to moderate injuries. If your injuries are severe and have also caused you significant pain and suffering and mental anguish, you might be able to recover a settlement amount comprising six or even seven digits.

Why You Shouldn’t Be Fixated on the Average Personal Injury Settlement

Don’t focus too much on the average personal injury settlement. Every plaintiff’s case is different, so what’s considered an acceptable settlement amount for one person might not be appropriate for the next. If you fixate on the average, however, you might end up making a mistake by accepting an amount that’s actually unfair for your case and won’t be effectively compensated for your damages.

Why Should You Ask for a Higher Amount for Your Personal Injury Settlement?

When you send your demand letter to the defense attorney, you should ask for a settlement amount that’s on the high side. Typically, in a personal injury case, the initial amount you request is rejected and the other side will make an offer that’s lower. While this doesn’t mean you have to accept that amount, it’s wise to start with a higher dollar amount because it puts you at more of an advantage once you begin to negotiate.

Why You Shouldn’t Ask for Too High a Settlement

It’s important to avoid asking for too high a settlement amount. If the initial asking amount is unreasonably high, the defense attorney or insurance company will outright reject it. This can also hurt your chances of negotiating and they will simply offer a lowball amount that’s much less than what you actually deserve to cover the costs of your medical expenses, ongoing treatment and other damages. As a general rule, you should aim for around 75 to 100% higher than what you envision ultimately receiving in your settlement.

Calculating an Appropriate Accident Settlement

If you were involved in a car accident and must turn to an insurance company to recover a settlement for your injuries and other damages, there is a specific calculation used to determine an appropriate amount of money. Insurance companies use a formula that multiplies special damages with lost wages to come up with a settlement. However, a major factor taken into consideration is the severity of your damages. The worse your damages, the higher the offer.

Determining Daily Losses

To effectively calculate an appropriate accident settlement, your daily losses have to be taken into account. Damages that can lead to such losses include physical pain and suffering, emotional distress, anxiety and other negative effects the accident has had on your regular daily routine and life, in general.

Using the Multiplier Method

The multiplier method can help determine the value of your damages from a personal injury case. When getting an amount from an insurance company, the insurance adjuster will add your special damages and use a multiplier between 1 and 5 to calculate a settlement amount the insurer might offer.

Accounting for Your Out-of-Pocket Expenses

Special damages are those that can be attributed to an actual dollar amount, including any out-of-pocket expenses you’ve suffered. They include your medical expenses, ongoing treatment, physical therapy and nursing care, lost wages and future earning capacity, property damage, services needed while you’re recuperating and your out-of-pocket expenses – things like medical equipment, medication and transportation costs.

Your expenses can vary from low to high depending on the severity of your personal injury and how the accident and your injury have impacted you psychologically or mentally.

What Is the Damage Cap Limitation for Personal Injury Cases?

Depending on your state, there may be a specific damage cap limitation to what you can recover in your personal injury case. A jury might rule that you deserve a certain amount of money in your settlement if your case is successful, but if it exceeds the state’s limit, you will receive less to comply with the law.

If your case involves medical malpractice, a federal damage cap limitation applies.

What Happens if the At-Fault Party Lacks Insurance?

If the party at fault for your personal injury lacks insurance coverage, you cannot recover compensation from an insurer. For example, if you were in a car accident with an uninsured driver, you would have to go through your own insurance company’s uninsured and underinsured motorist coverage.

Unfortunately, in this situation, it’s very possible that the individual would not have the funds necessary to adequately pay for a settlement if you file a personal injury lawsuit directly against them.

Factors Involved in a Settlement Demand

Your damages are the factors involved in your settlement demand. They should reflect an amount that you consider fair for your medical expenses, lost wages, pain and suffering and other notable losses. Anything that stands out and strengthens your case should be stressed. For example, if your injuries are permanent or the defendant’s conduct was outrageous.

How Lost Income is Factored

If you’ve missed time from work due to your injury, you’re entitled to lost income damages. This is calculated based on your regular salary, sick days, vacation time and personal time if you used them to take off work. Getting a letter from your employer that states all the details of your job and pay can help determine this information. You can also use pay stubs, invoices and income tax returns.

Determining Lost Future Earning Capacity

Determining the value of lost earning capacity is sometimes challenging, but certain evidence can show what you would have earned while you’re unable to work due to your injury. Your wages, bonuses, education level, age, health, promotion opportunities, industry and years to retirement are major factors.

Valuing Pain and Suffering

The value of pain and suffering in personal injury cases can be determined based on how many days you’ve suffered. The number of days is multiplied by the variable of your special damages, which ranges from 1.5 to 5. For example, if your economic damages were 10,000 and your variable is 2, your pain and suffering would equate to $20,000.

Valuing Mental and Emotional Trauma

Placing a value on mental and emotional trauma can also be difficult, but your attorney can help determine how much they’re worth. You can get a reasonable amount for these damages as well as other losses.

Valuing Lost Experiences and Opportunities

Damages involving lost experiences and opportunities are also hard to value. If you’ve missed a work-related opportunity like a new job, you might be able to show how much you would have earned. Other situations such as a trip you would have taken if not for your injury can be determined based on what you’ve already spent in preparation for it. Your attorney can help you place a monetary amount toward these damages.

Valuing Property Damage

Property damage is easier to determine. For example, if you were in a car accident, a mechanic can examine your vehicle and tell you whether it can be repaired or if it’s totaled. You can get an actual price to attribute to property damage.

Insurance Policy Limits Affecting Personal Injury Settlements

When getting a settlement for personal injury from an insurer, there are policy limits on what you can recover. This caps the amount of compensation the insurance company will pay. In other words, if your damages go beyond what the policy covers, you’re out the difference in that amount.

What Factors Affect Settlement Amounts?

Different factors affect a settlement amount in personal injury claims. They include the severity of your injury, how it disrupts your life, your treatment and recovery, emotional and psychological trauma and the at-fault party’s level of liability. Depending on all these factors, your settlement might be higher or lower.

Severity of Your Injuries

If your injuries are very severe, it’s reasonable to ask for a higher settlement amount. With milder injuries, something lower is usually acceptable.

Level of Fault

The defendant’s level of fault also determines what you might expect from a settlement. Depending on the state where the accident occurred, you might be found partially liable for your injuries. The percentage you’re determined to be at fault for is factored into your asking amount and you receive what’s left.

How Witnesses and Evidence Factor

Witnesses can testify as to how the accident occurred. Evidence can also help your case and claim for a settlement amount.

Personal Injury Settlement Calculation

You can calculate a settlement amount appropriate for your personal injury claim by multiplying the total of your expenses by a number ranging from 1 to 5. This is the multiplier method as previously discussed.

Determining Economic Damages

Economic damages are those that have an actual cost. They include aspects like medical expenses, lost wages and property damage. Calculating the costs of these damages can determine their value.

Determining Non-Economic Damages

Non-economic damages don’t carry any specific monetary amount. These include things like pain and suffering, emotional distress and loss of enjoyment of life.

Don’t Be Unreasonable Asking for an Amount

You should ask for a slightly higher settlement amount for your injuries, but be careful: if the amount you request is unreasonably high, you run the risk of not getting the amount you deserve. Requesting a slightly higher amount opens the door to compromising a fair settlement.

Which Personal Injury Cases Get the Highest Settlements?

One of the biggest personal injury cases with the highest settlements was a case against the tobacco companies with $145 billion. Medical malpractice, certain car accident cases and those involving dangerous products or substances often result in higher settlements.

How Personal Injury Settlements are Paid

Personal injury settlements are paid out by check through the at-fault party’s insurance company. Your attorney deposits it for you into a legal trust account. However, before you receive your compensation, you may owe money to other parties such as doctors. Your attorney will work hard to ensure that these costs are minimized so that you can recover the majority of your settlement. Often, you can receive multiple payments or a lump sum.

Lump Sum Payouts

Lump sum payouts mean you receive the entirety of your personal injury settlement. It’s made with a single payment.

Structured Settlement Payouts

Structured settlement payouts in personal injury cases mean you receive a set amount of your settlement paid each month.

Taxes on Personal Injury Settlements

Personal injury settlements are not taxed on the state or federal level. This means you receive the money and don’t have to worry about paying taxes toward it.

How Long it Takes to Get Your Settlement

The length of time it takes to get a settlement depends on the complexity of your personal injury case. It could take as little as several weeks or up to a few years.

Who Decides How Much Money You Get in Your Settlement?

How much you receive in a personal injury settlement depends on how the case is resolved. If it goes to trial, a jury decides on the amount that’s fair for you. Sometimes, a judge makes the decision. If you settle before going to trial, you might reach a mutual decision with an insurance company.

What Reduces Your Settlement Amount?

Your settlement amount can be reduced by medical liens, additional out-of-pocket expenses, various court costs and attorney’s fees.

Medical Liens in Personal Injury Cases

Medical liens are legal claims filed by an insurance company or medical provider that say a third-party should be paid for medical treatment you received after your accident. They ensure that bills are paid through a portion of your settlement.

What Additional Bills Do You Have?

In personal injury cases, you often have additional bills for ongoing treatment. These are often paid out-of-pocket initially, but they can be claimed as part of your settlement.

How Are Attorney’s Fees Handled?

In personal injury claims, the attorney receives a portion of your settlement, known as a contingency fee. This usually ranges between 33% to 40%. However, you don’t have to pay if you don’t win your case.

What Other Expenses Are There?

Other expenses in personal injury cases include court costs, expert witness fees, investigation costs and various administrative expenses.

Why You Should Always Get Legal Representation

Seeking legal representation is crucial for personal injury cases. You have a much better chance of a successful outcome when you have an attorney on your side. They know how to negotiate a satisfactory settlement in your case.

Frequently Asked Questions

Can I Turn Down a Low Settlement Offer?

It’s a common tactic for insurance companies to make lowball offers to personal injury plaintiffs. You have the right to refuse if it’s an unfair amount. Your attorney can help you get a settlement amount that’s more than fair to cover the costs of all your damages.

What Are My Options if I Turn Down a Settlement Offer?

If you turn down a settlement offer and the other side doesn’t accept the amount you negotiate, you can then take the case to trial.

How Much Are Most Car Accident Settlements?

Many car accident settlements range from four digits to five digits, depending on the severity of the person’s injuries and property damage.

What Is the Average Payout for a Personal Injury Claim?

The average payout of a personal injury claim is over $60,000. However, the specifics of your case and the severity of your injuries factor into what you might recover.

What Should I Ask for in a Personal Injury Settlement?

You should ask for slightly more money than your case is worth when seeking a personal injury settlement. That way, you have some wiggle room to negotiate a fair amount if the other side isn’t willing to accept that initial asking amount.

How Long After Demand Letter Can I Expect Settlement?

After you’ve sent your demand letter, you can expect your settlement to come anywhere from two weeks to two months later.