How Is a Car Accident Settlement Determined?
After a serious wreck that jeopardizes your health, well-being, and financial future, it is worth understanding how a car accident settlement is determined. In some cases, your losses may be covered under your personal injury protection (PIP) policy. In others, you may need to seek compensation from the driver (or the driver’s insurance company) responsible for the losses you have endured—and will endure—as a result of the collision.
Many car accident cases are resolved via settlement. But, before accepting a settlement, it is extremely important to make sure you know how much you are entitled to recover. You only get one opportunity to settle, and settling for too little will mean moving on without the compensation you deserve.
The experienced car accident attorneys at Colling Gilbert Wright & Carter have a proven record of success in a range of accident cases. If you were hurt in a collision, we have the skill and resources you need to get your life back on track.
The Two Key Elements of a Car Accident Settlement
So, how is a car accident settlement determined? The first thing to understand is that car accident settlements consist (or can consist) of two key elements:
1. Financial Losses
A car accident settlement should provide just compensation for your financial losses. These include your medical expenses, lost earnings, and other out-of-pocket costs. Under Florida law, accident victims are entitled to just compensation for their current and future losses, but accident victims must be able to prove that they have suffered a “significant” or “permanent” injury in order to secure compensation outside of PIP.
2. Non-Financial Losses
If you have a claim outside of PIP, your car accident settlement should also include compensation for your non-financial losses. These losses include your pain and suffering, emotional trauma, loss of consortium and companionship, and loss of enjoyment of life. While you may never truly be able to recover what you have lost, securing compensation for your non-financial losses as part of your settlement can help you move on with your life.
Determining How Much to Seek in a Car Accident Settlement
Determining how much to seek in a car accident settlement requires separate calculations of your financial and non-financial losses. You cannot rely on insurance companies to make these calculations for you. The insurance companies do not have your best interests in mind—their focus is on paying you as little as possible.
To determine how much to seek for your financial losses, you will need to work with your lawyer to collect evidence such as:
- Medical Bills – To calculate the costs of your treatment to date, you should ensure that you have copies of all of your medical records, medical bills, and statements of benefits related to your accident.
- Future Medical Needs – To accurately assess the cost of your future medical needs, you and your lawyer will need to work with an experienced specialist (or team of specialists) who can provide a long-term treatment plan and prognosis.
- Lost Income and Benefits – Similar to calculating your medical bills to date, calculating your lost income and benefits will require you to collect all relevant forms of documentation (i.e., paystubs, W-2s, 1099s, and tax returns).
- Lost Earning Capacity – Based on your long-term prognosis, your lawyer will be able to calculate an appropriate settlement amount for any loss of earnings you are likely to experience in the future.
- Other Out-of-Pocket Costs – Evidence of other out-of-pocket costs may include receipts for prescriptions and medical supplies, as well as receipts or bills for transportation, home cleaning, landscaping, and other services.
Methods to Determine the Value of a Car Accident Settlement
Since it is not possible to simply add up your non-financial losses, calculating a fair settlement amount for these losses requires a different approach. Typically, determining a fair settlement for non-financial losses involves using one of the following methods:
- Multiplier Method – With the multiplier method, compensation for non-financial losses is determined by multiplying a car accident victim’s financial losses by a number, usually between 1 and 5, that is based on the severity of the victim’s physical injuries and other non-financial harm.
- Per Diem Method – With the per diem method, compensation for non-financial losses is determined by assigning a “daily rate” to a car accident victim’s non-financial losses, and then multiplying this figure by the number of days the victim is expected to experience these losses.
While these are some of the key factors involved in car accident settlements, several additional factors can come into play as well. This includes everything from the available insurance coverage to whether you played a role in causing the collision. Ultimately, the amount you are entitled to recover depends on the unique facts of your case, and you will need to work with an experienced lawyer to calculate a fair settlement.
A car accident settlement is determined through investigations, negotiations, and hard work. Don’t settle for less than you deserve. The Orlando car accident attorneys at Colling Gilbert Wright & Carter can help you pursue the justice and compensation you deserve.
To find out how much you may be entitled to recover, schedule a FREE consultation today. Call (800) 766-1000 or contact us online to speak with a lawyer in confidence as soon as possible. We welcome clients from Orlando and throughout Florida.