With all the billboards around Orlando showing “examples” of folks getting multi-million dollar figures out of their personal injuries, you may rightfully be wondering, “How Much Can I Expect from a Car Accident Settlement?” Continue reading below to learn more.
Table of Contents
- 1 Requirements for a Car Accident Settlement
- 2 Personal Injury Drives Real Settlement Value
- 3 How Car Accident Settlements Are Calculated
- 3.1 Step One: Establish A Range on Trial Value
- 3.2 Step Two: Determine the Availability of Insurance Coverage
- 3.3 Step Three: Compare Damages to Coverage
- 3.4 Step Four: Negotiating Within the Limits
- 4 What If The Case Does Not Settle?
Requirements for a Car Accident Settlement
To settle with an auto insurance company for a car accident, your case must meet a few requirements: (1) the other party must be at fault, that is, you must not have caused the accident; and (2) you must have suffered “damages” as a result of the accident, that is, you must have faced some harm from the accident whether in the form of property or injury. (More on the importance of injury later.)
Damages Are Required
Without damages, there is no possible settlement value. Damages come in two forms:
Property Damage (Less Important); and
Property damage is the damage sustained to your vehicle and personal material belongings within said vehicle. If your accident caused $7,500.00 worth of damage to your vehicle, your property damage is established to be worth $7,500.00 at minimum. If you are able to prove that the accident also caused the loss of your items within the car, you may add that value to your total property loss as well.
Overall, the amount of property damage you sustain in the subject accident is of little importance. This is not because you are not owed for these losses. Indeed you are, and in fact in all likelihood you will be reimbursed to the extent coverage exists. Property damage losses usually have little room for debate and thus are resolved in a fairly straightforward manner. Insurance companies will seek documentation showing the damage estimates to your car and verifying the ownership and values of your damaged/lost items, and then they will be quick to reach a property damage settlement with you. This value, whatever it may be, is less interesting because presumably you are being reimbursed for what you have already lost. In other words, regardless of how much you are paid for property damage, in most cases you will still “net” zero in the end.
Bodily Injury (More Important).
Bodily injury is the more important aspect to determining possible car accident settlement values. If you were hurt in any way, shape, or form in the subject motor vehicle accident, you have a bodily injury claim. Bodily injury damages are those that address the medical injuries you sustained in the subject accident. They cover, at minimum, your already incurred out-of pocket medical expenses for your accident related injuries. But they also cover the costs of any projected future medical care that you may require. And even further, they can include other damages such as pain and suffering, mental anguish, diminishment in quality of life.
Bodily injuries are the more important factor in calculating possible auto accident settlement values because unlike property damage, they seek to compensate the injured party for expenses that have not yet been incurred. In other words, unlike being reimbursed for vehicle repair where every dollar you are reimbursed is presumably a dollar you already paid to someone else, injury awards meant to compensate you for pain and suffering go directly into your pocket. And for the most part, are yours to keep.
Personal Injury Drives Real Settlement Value
As discussed above, auto accident settlement values ultimately depend on personal injury. It is a sad state of affairs because in some cases there are situations where someone with little demonstrable personal injury actually did suffer great mental harm from an accident. And while the theory of the law suggests that the injured person in such a circumstance has indeed suffered compensable damages, the practice of the law suggests otherwise. Nevertheless, in cases where there are clear cut personal injuries that were caused by another person’s negligence, a valid personal injury case exists. And where a valid injury case exists, automobile insurance companies will typically jump at the opportunity to settle.
Car Accidents Are Potential Personal Injury Lawsuits
Why will auto insurance companies settle if they see that you were injured? Simple. When you are injured in an auto accident to no fault of your own, insurance companies see only one thing: a potential personal injury lawsuit. And it is this, and only this, that drives them to settle. Without facts that give rise to a potential personal injury lawsuit, they will not settle. (Do not jump to any conclusions, however. A good personal injury attorney can typically find an effective way to structure a case even where the injured party’s position is “difficult” to articulate.)
Injury Lawsuits Are Comprised of General Damages and Special Damages
Because car accident cases fall under the legal category of “personal injury” cases, potential settlement values must be measured in context. In Florida, a personal injury case entitles the injured party to two types of damages: general damages and special damages. Special damages, also known as “economic damages,” are awarded to reimburse the injured party for out-of-pocket expenses such as the cost of prior and future medical care, the cost of hiring support staff to help at home after the injuries, or even the replacement value of personal property lost in the subject accident. General damages, also known as “non economic damages,” on the other hand, are awarded to the injured party for losses that are less quantifiable or measurable. These losses include future pain and suffering, diminishment in your quality of life, disfigurement, and even mental anguish.
RELATED: “General Damages vs Special Damages”
Therefore, when calculating possible settlement values of your case, structure your final number as the sum of two figures: the dollar amount the jury will likely award for your out-of-pocket damages, and the dollar amount the jury might award for your pain and suffering.
Bonus: Why Does the Jury Matter?
If you are paying close attention to the wording used throughout this article, you may have picked up on a nuanced inconsistency in our discussion that has yet to be reconciled. This article’s title focuses on car accident settlements, not jury verdicts. A jury verdict ordinarily implies a lawsuit. And if one is attempting to settle a case without the filing of a lawsuit, why then does the proverbial “jury” and its opinion of the case matter at all? The answer is simple: settlements are reached only in avoidance of lawsuits. The preceding sentence is worded carefully. And its logical contrapositive is precisely correct: if the threat of a lawsuit is not real, the case has no settlement value. Thus if you are to try and forecast a case’s value, you must necessarily start your analysis with what the case’s value could be in front of a jury. Because even if you are not thinking of it that way, that is precisely how the other side will be thinking of it.
How Car Accident Settlements Are Calculated
Any good lawyer will tell you that the following analysis should be avoided without good legal counsel, that it should be taken with a grain of salt, that there are many exceptions to the rule, and so on and so forth. Incidentally, he/she would in fact be right. But since you are not here for that and instead want a straightforward method for attempting to measure your case’s value, let us discuss such a valuation method . . . purely as an academic matter.
Step One: Establish A Range on Trial Value
Insurance companies settle cases to avoid going to trial. If they offer to settle on an auto accident case, it is because they think they could lose more at trial than whatever they are offering you. Thus, if you want to know what to expect from a settlement, you must first assess the range of exposure your case presents to the insurance company.
Ask any random collection of people the question of “What is My Auto Accident Case Worth?”, and you’ll find that there are typically two categories’ of answers (and their respective valuation methods): typical attorneys/over-simplifiers and pragmatists/academics. As you will see below, I pride myself on my pragmatic and academic approach to this topic. Personal injury cases are not meant to be measured by formulas, and vetting cases in such a way only leads to suboptimal outcomes and worse, injustice.
Over-Simplification: Pain and Suffering Multiplier
For the sake of completeness, I will reluctantly provide a brief discussion on the so called “pain and suffering multiplier” method. This method is quick and dirty and provides a quick way of coming up with case valuations on the fly. As a predictor of actual case value this metric is useless. Its only practical use comes in the form of comparison between cases, and thus it allows for crude and basic illustrations of certain concepts to non-lawyers.
The method is simple. Start with your economic damages amount. Then arbitrarily choose a “multiplier,” typically a number on a scale of 1-5. And then multiply the economic damages amount by said multiplier for a final, total damages amount. This final number is your total supposed case value, and the difference between this final number and your initial economic damages amount is implicitly what you are assigning to be the non-economic damages amount of your case.
For example, let’s keep things simple assume that your economic damages, i.e., your out-of-pocket expenses, consist of a single hospital visit’s medical bill of a flat $35,000.00. Let us assume that you have legitimate severe long term injuries, and on our arbitrary 1-5 scale, we assign your multiplier score as 3. Using the pain and injury multiplier method, therefore, you case value would be estimated as $35,000.00 x 3 = $105,000.00. Therefore you would estimate your case to be worth a total of $105,000.00, with $35,000.00 for your economic damages and $70,000.00 for your non-economic damages.
As you can likely see already, the comically oversimplified valuation method of this formula produces little real, usable data. The multiplier is, after all, arbitrarily chosen, and no formula can properly take into account the human factors that make each and every personal injury case unique.
Pragmatic Truth: “It Depends”
The truth is that no single formula can be used to properly assess the value of a case. Sure, where there are no injuries, the above formula helps. Because if you establish that the economic damages are $0.00, then yes, the formula can be used to correctly demonstrate that the overall case value, i.e, economic damages times the multiplier, will still be $0.00, regardless of what multiplier is used. But when you start talking about real cases with real people and real injuries, any attorney worth his or her salt will tell you that every case is unique, and the true value of all cases depend on the facts, as well as the intuition and experience of the handling attorney.
Economic damages are indeed a good starting point. Like I said above, in a case of $0.00 economic damages, usually the case will ultimately not have settlement value worth pursuing. And in cases where economic damages are high, indeed the economic damages number does give you insight on the case value’s floor. If you faced legitimate hospital bills of $65,000.00 from an auto accident, for example, you will typically at minimum have a case value worth at least that same amount.
But the multiplier is where the predictive value lies. The multiplier is meant to predict the amount of your case that is meant to go directly into your pocket, value that is meant to compensate YOU for YOUR pain and suffering and the long term effects of the accident on YOUR life.
And, as you can imagine, this component of your case is so critically important to the case’s overall value, that is cannot be left to a simple formula. Each and every personal injury case must be carefully reviewed and inspected by a trained attorney so that all facts and circumstances are taken into account. The soft factors of cases make a TREMENDOUS difference on overall case value, and they cannot be overlooked as a general catch-all multiplier of out-of-pocket damages.
Take for example a case where someone suffered low medical expenses but the resulting damage to his or her quality of life was extreme in nature. How does a formula account for the value that should be properly attributed to this person’s case? Do you raise the multiplier by 1? 2?
At the heart of every compelling personal injury case lies a compelling story. And this story is one to be discovered and investigated by an attorney, not by a formula. But I digress . . . .
Step Two: Determine the Availability of Insurance Coverage
After coming up with an estimated range of values within which your case falls, then you must look at how much insurance coverage is available in your case. Establishing the value of your case is a great first step, but to properly assess the possible settlement value of your case, you must first understand the coverage limits that are available for such a settlement. After all, if there is no insurance coverage available to cover your losses, then there is no insurance carrier with whom you can settle. At that point, your only recourse is using the personal injury protection benefits available on your FL auto insurance policy, and any related medical payments coverage that may apply, and exploring options to potentially sue the offending party directly.
Bodily Injury Motorist Coverage
Florida does not require motorists to carry bodily injury (“BI”) coverage on their auto policies. This means that motorists may lawfully drive on Florida roads, with insurance policies that are technically valid by the way, and still carry ZERO insurance coverage to cover others’ injuries in the case of these motorists causing the accident. This is a devastating revelation for people who are injured to no fault of their own and then later find out that the at-fault party is carries no BI coverage. I have witnessed many heart-wrenching scenarios of people learning that they are completely on their own to handle permanent, life-altering disabilities caused by the recklessness of another motorist–it is always a painful experience.
Therefore, the first step in determining the values for which your case could settle involves an efficient and targeted investigation of all auto insurance policies at play. This step is crucial and can often be messed up by inexperienced attorneys. I will write a more in-depth article on this topic at a later time, but for now I will say that often times it is possible to identify multiple auto policies that all technically concurrently provide coverage for the injured party. In such a case, even where one investigation turns up no coverage, another investigation can turn up just the opposite. Having an experienced personal injury attorney on your side can be the difference between having real case value and having no case at all.
Uninsured Motorist Coverage
In situations where bodily injury coverage is not available, there is one failsafe that can apply, but only if it was specifically elected for on the applicable auto insurance policy. This is uninsured motorist (or underinsured motorist) (“UM”) coverage , and it is an extremely important, optional component on Florida auto insurance policies. In essence, UM coverage is a coverage for bodily injury that kicks in specifically in circumstances where the at-fault party is either uninsured or under-insured. Thus, whether the at-fault party is carrying no coverage or simply not enough coverage to cover the underlying value of the case, UM coverage, if opted for on the policy, will kick in as a secondary source of funds.
Note: While UM coverage is optional in Florida, all auto insurers MUST have a SIGNED waiver from the insured on-file indicating that the insured specifically wishes to NOT carry UM coverage. If the insurance carrier does not have this on-file, i.e., you never signed such a waiver, you may be eligible for free UM coverage even though you did not opt for it on your policy. Contact MANGAL, PLLC today to reach out to your insurance company and help you figure out whether UM coverage can apply in your case.
Total Coverage = BI Coverage + UM Coverage
In analyzing the total available coverage for your personal injury case, it is easiest to consider as a single number the sum of any and all BI and UM policies together. Thus if the at-fault party carries $25,000.00 in BI coverage and you carry another $50,000.00 in UM coverage, for the purposes of easily calculating possible settlement outcomes on your case, assume you have a total of $75,000.00 available from which you can settle your case.
Step Three: Compare Damages to Coverage
After establishing the value of your case and then determining the total insurance coverage available for your losses, compare the two figures and ask yourself whether there is any amount within the total available insurance coverage for which you would settle your case. This question is complicated to answer but easy to ask. For example, with the numbers used in our hypotheticals above, we have thus far established a hypothetical economic damages amount of $35,000.00, and a total available insurance coverage amount of $75,000.00. Using our crude multiplier method, we think that our case could plausibly be worth around $105,000.00, but we know that our formula is rough and not meant to be taken as anything close to a final number. Therefore we know that our case at minimum should cover our out of-pocket expenses, thereby making the floor at least $35,000.00, and we know that a middle-of-the-run multiplier valuation comes out to $105,000.00, which is $30,000.00 more than the total available insurance coverage in our case.
So what does this mean? Well, if we were to guess at possible settlement outcomes from a car accident with these damage figures, assuming all other facts of the case are textbook “perfect” and there are no other unanticipated issues, we would perhaps guess that possible values on this case would be anywhere from $40,000.00 up to a maximum of $75,000.00. We would acknowledge the possibility of a theoretically weak non-economic damages case and accept as a possibility a total final outcome of only $40,000.00, and we would know that no matter what even on our best day the insurance companies, even together, simply cannot offer more than $75,000.00.
Step Four: Negotiating Within the Limits
From this point, if we choose to negotiate, i.e., we believe there is an amount within the available limits for which we would be willing to settle, then we proceed with negotiations. Here it is more important than ever to have a skilled attorney on your side. Cases can sometimes be slam dunks on their facts only to later be messed up due to poor case management by an attorney, or worse yet, a non-attorney pretending to work on the case as an attorney. If you are willing to consider a settlement without resorting to a lawsuit, do yourself a favor and negotiate with focus, effort, and tenacity. Or better yet, find yourself an experienced attorney who can do it for you. Do not settle for less than what you deserve.
What If The Case Does Not Settle?
Not all cases settle, even where the facts are clearly in favor of the injured party. Insurance companies can usually see the writing on the wall and thus do settle in most cases, however there are times when they fight simply for the sake of fighting. And in these cases, you must be armed with representation that does not back down from a fight. Cases may not reach settlement for all kinds of reasons, and more often than not it is not because of a defect in the merits of a given case.
Reasons Why a Case May Not Settle
There are a variety of reasons why your case cannot be settled. In its most simplistic form, however, a case’s failure to reach settlement can ultimately be blamed on one of two semi-tongue-in-cheek reasons:
1. You Are Asking For Too Much; or
No, I am not saying your case is worth less than you think. And yes, I know it sounds like I am. It is a joke. This scenario of a case failing to settle actually refers to a situation where your asking amount is legitimate but may be a high number, and the insurance company wants to make you work for it just for the sake of making things difficult.
Thus, it is the case that sometimes when your case is worth over a certain dollar amount, auto insurance companies will make things difficult on purpose. They can be fully aware that a given case is truly worth $300,000.00, for example, and still refuse to tender a check for that amount even where there is ample coverage.
The truth is, most of the time when you are “asking for too much,” you are actually only asking for an amount that is too much for the insurance company to swallow comfortably. Your case can very well be worth the $300,000.00 that you are alleging, but if the insurance company does not feel like settling, they will force you to file suit or pressure your attorney to accept a low-ball settlement offer.
2. They Are Offering Too Little.
As opposed to the previous scenario in which an insurance company knows the case is worth a lot of money but chooses to make things difficult for you on purpose, this scenario addresses the situation in which an insurance company simply does not see the case to be valued at what you are alleging. This situation can occur, for example, where you have a case that is conservatively worth $45,000.00, hypothetically, and despite the available coverage being $50,000.00, the insurance company will only settle for $35,000.00, which leaves you with $500.00 total in your pocket for pain and suffering. In this type of a case, even if you have the option of settling, your case would not settle because your attorney would correctly advise you that a lawsuit must be filed.
In many cases auto insurance companies can low-ball unsuspecting persons and take advantage of their kind-hearted, non-litigious nature. They will ask you for information on your incurred out-of-pocket damages and proceed to later offer reimbursing you for the expense and throwing an extra grand or so in “to compensate your for your troubles.” You should be highly skeptical of any offers made by insurance companies for your case, especially where you do not have an attorney on record. Avoid settlement at all costs. And if you have an attorney and they still make such unconscionable offers, sit down with your attorney and generate a game plan to sue them for everything you can.
Explore Filing Suit in EITHER Case
As I discussed above, either situation above where your case fails to settle can still be remedied with a lawsuit. Many personal injury attorneys shy away from lawsuits and will do everything in their power to dissuade you from filing suit. Here at MANGAL, PLLC, we pride ourselves in litigation and believe that every injured person deserves their day in court regardless of the case’s value. If your case is not reaching settlement, do not give up. Contact us right away to learn more about alternative options for successfully resolving your accident.
Contact MANGAL, PLLC for a Straightforward Analysis of Your Case
Attorney Avnish K. Mangal, Esq. is an experienced personal injury attorney that is passionate about his clients’ cases. He is thorough and attentive to detail. He does not back down until his clients get every last dollar they deserve. Contact MANGAL, PLLC today, and fight your case with the law by your side. Call (407) 777-4638 now, or send a text message to the same number. Someone will reach out to you ASAP.