Car accident settlement amounts can vary greatly because each settlement is based on the unique factors of the accident. The severity of injuries, amount of damage to vehicles and other property and number of people injured can all radically change the settlement amount negotiated by the parties. Still, we have some numbers:
- According to surveys, average settlements in 2020 were between $20,000 and $25,000
- A Survey from the Insurance Information Institute found an average injury settlement amount of $20,235 and an average property damage amount of $4,711.
- A Martindale-Nolo survey found an average settlement of $23,900.
- Most survey respondents, however, received less than $10,000.
Learn more about the factors that go into settlements and how settlement offers are calculated below.
How Car Accident Settlements Are Calculated
First things first: Knowing the average car accident settlement amount isn’t very useful to victims, because every car accident settlement is calculated based on the unique circumstances of the collision.
Crash victims who sustain only minor property damage, for example, would be offered far less money from an insurer to settle a claim than those who lose loved ones to an accident or who sustain permanent injuries.
Car accident settlements are intended to cover the losses a crash victim experienced. Typical car accident settlement amounts are based on:
- Medical bills
- Lost wages
- Pain and suffering
- Emotional distress
- Property damage
The coverage of insurance available and a determination of who is at fault will also affect the average car accident settlement.
Settlements: The Most Common Outcome in Personal Injury Claims
Before looking for car accident settlement examples, it’s important to understand exactly what settlement means.
When a crash happens, in most states, the person who is responsible for causing the accident is expected to cover a victim’s damages. Or, more specifically, that person’s liability auto insurance will pay out for medical bills, property damages, lost wages and other losses.
The insurer who represents the person who caused the crash will generally make a settlement offer to collision victims. This would be a lump sum payment, in exchange for which the victim gives up all rights to further claims. If the victim accepts the settlement, the case is resolved. But if the victim doesn’t believe the offered compensation is fair, a car accident lawsuit can result.
Although lawsuits do happen after motor vehicle accidents, most cases settle outside of court. In fact, a Martindale-Nolo survey of readers who had received car accident compensation found that 98% obtained their funds through a settlement rather than a court case.
Most claims settle both because insurers generally want to avoid the cost of a trial and because victims often want to avoid the time and uncertainty of a trial.
How Long Will It Take to Get a Car Accident Settlement?
Car accident settlements typically occur fairly quickly, which is one advantage of settling a claim versus pursuing a lawsuit.
According to Martindale-Nolo, it took an average of 10.7 months for collision victims to receive a car accident settlement. More than half of victims were able to resolve their claims within six months.
How Much Can I Get for My Car Accident Claim?
The amount of compensation available for a car accident claim depends on the extent of damage suffered and other factors.
Data on average car accident settlement amounts varies by source. The Insurance Information Institute reports the average claim for bodily injury after a collision was $20,235 in 2020, while the average property damage claim was $4,711. However, a Martindale-Nolo survey of readers who made car accident claims between 2015 and 2020 reported an average settlement of $23,900. Most received less than $10,000.
Factors That Affect the Amount of Car Accident Settlements
Many different factors impact the average car accident settlement, including the following:
Insurance Coverage
In most states, drivers are required to have liability insurance. Insurance pays out compensation to victims when the policyholder is at fault. But the insurer pays only up to policy limits. If damages exceed the amount of insurance coverage, the insurer will not pay the excess.
It is possible for accident victims to pursue a claim against the at-fault driver directly for losses not covered by insurance. But many people don’t have enough assets to actually pay additional damages even if the court were to award them.
As a result, if an insurance company makes a settlement offer at the policy limit, pursuing a court case to try to obtain additional compensation may not be worth it.
Liability
When liability is clear in a collision, this can result in a larger settlement. The insurer representing the driver who is at fault for the crash will accept responsibility and likely provide a reasonable settlement offer with the goal of avoiding a lawsuit.
If fault is uncertain, no settlement may be forthcoming or a settlement offer may be lower. And if fault is shared between the drivers, this can have a major impact on car accident compensation. Here’s what happens when fault is split, with both drivers partly to blame for the accident:
- In some states, called contributory negligence states, if a driver is even 1% at fault for a collision, he cannot collect any compensation from the other motorist who was mostly to blame.
- In pure comparative negligence states, on the other hand, a driver is allowed to collect compensation from another motorist for injuries even if the driver was mostly at fault. For example, a driver who was 75% responsible for a crash could still pursue a claim against the other motorist and could receive compensation for 25% of total losses
- In modified comparative negligence states, a driver can pursue a claim for compensation as long as he is not 50% or 51% responsible for the crash. Again, compensation would be reduced based on the driver’s share of the fault.
Severity of Injuries
Severity of injury is a major factor determining typical car accident settlement amounts. The Martindale-Nolo survey revealed the average compensation for car accident victims who were not injured was $16,700 while the average award for injured crash victims was $29,700.
State Laws
In some states, called no-fault states, drivers must first rely on their own insurance coverage to pay for their own injuries or injuries to their passengers. Once their coverage is exhausted then they can seek compensation from the other driver’s insurance.
Drivers must buy personal injury protection, which typically covers up to $10,000 in medical bills and lost wages. For these minor injuries, additional damages such as compensation for pain and suffering are not generally available.
In fault states, on the other hand, the driver who caused the crash will always be responsible for losses. In these states, even relatively minor crashes can result in settlement offers from the at-fault driver’s insurer that may provide more comprehensive compensation.
Financial Loss
Finally, the extent of financial loss affects typical car accident settlement amounts. The settlement is generally designed to make a crash victim whole for the losses the collision caused. This includes both losses related to injuries, such as lost wages, as well as losses related to property damage.
If a motorist sustained substantial losses due to missed work, medical bills, and extensive property damage, the settlement should also reflect this.
Frequently Asked Questions (FAQs)
Do I need an attorney to get a car accident settlement?
You do not have to have an attorney and can negotiate with the insurance company on your own. However, an experienced attorney can assist with negotiating a settlement or with pursuing a case in court if no settlement can be reached and may be able to obtain a higher settlement for you. Keep in mind that a settlement offer is just the opening bid in negotiations.
Crash victims should ask potential attorneys for their car accident settlement examples so they can understand how the attorney has performed for past clients. It’s also important to make sure the attorney has experience with similar crash types.
How is pain and suffering calculated?
Pain and suffering is the physical and emotional trauma and suffering car accident victims experience. Some insurance companies total the medical and property damage bills and multiply that by a number between 1.5 and four depending on the severity of the case to calculate an offer for pain and suffering.
However, be aware pain and suffering are highly subjective and personal and a skilled attorney can present a convincing case for a higher award.
What is a good car accident settlement offer?
A good car accident settlement offer is one that fully covers your medical expenses, property damage, and time off from work. It compensates you adequately for the pain and trauma you have experienced related to the accident. A skilled attorney can evaluate your settlement offer and advise you if it is reasonable.
