How Much to Ask For in a Personal Injury Settlement?

All you need to know about a Personal Injury Settlement.

Personal injury is a legal term for an injury caused to one’s body, mind or feelings instead of an injury to one’s property. This term is usually used in cases where one party files a claim for a personal injury where they have suffered harm either to their body or to their mind or emotions. This lawsuit is usually filed against the party that caused the harm through their conduct or omission. The causal reason behind the harm could be through gross negligence, recklessness or the harm being intentional.

Personal injury cases are common in car accidents as there is usually some harm caused to one party. In cases like these, the person whose fault the accident was is the one who gets hit with a personal injury lawsuit. It is fairly common for individuals who have been in a car accident to demand the cost of damages sustained to their car. However, it is also common for these individuals to demand compensation for any or all personal injuries they might have sustained.

Besides bodily injuries, there are many injuries of the mind that can come from a car accident. For example, you could experience Post Traumatic Stress Disorder (PTSD) in severe accident cases where you might be unable to drive again or sit in a car again, leading you to face many hurdles in your everyday life. In such cases, it makes sense to pursue compensation for your personal losses and injuries via the court system.

However, your insurance provider or the insurance provider for the other party involved will prefer that you make a personal injury settlement.

What is a Personal Injury Settlement?

A personal injury settlement is an agreement between two parties where one party pays a sum of money to the other party in order to avoid taking the case to trial and hoping they will agree.

Insurance providers prefer personal injury settlements as this leads to avoiding the cost of defending the case in court. Moreover, taking a case to the court can be very time consuming. Which is why insurance providers, regardless of whether they are on the claimant or defendant side, will prefer an out of court settlement on a personal injury case.

It is not only beneficial for insurance companies, but for the claimant as well. It will save them from the court fees as well as avoid having to wait months on end for a court decision. That is, if their proceedings were not already delayed otherwise it can also take years. The entire process can take a long time and ultimately, cause a hindrance to your long term as well as everyday life.

Moreover, besides the obvious drawbacks, taking a case to court also has a huge risk attached to it. In case you lose the case in court, you end up receiving nothing. Whereas you easily could have received a huge sum as payment in a personal injury settlement. So overall, a personal injury settlement does not only help insurance providers but is equally beneficial for all parties involved.

How is a Personal Injury Settlement Claim Filed?

When you have an insurance policy, no matter what kind of mishap happens, the fact that you are insured always comes into play. It could be a car accident, a slip and fall or an accident where someone else is at fault. You can choose to file a claim under your insurance coverage which means your insurance company will contact the insurance provider for the other party involved in the accident and demand reimbursement for the damages or injury caused. You will not have to get your hands dirty as your insurance company will do it for you. You can also choose to file a third party claim directly with the insurance company of the at-fault party.

However, insurers only care about two things in a personal injury case: cutting costs and minimizing the risk, both of which increase when a case goes to the courts. So whichever way you choose to file your claim, insurers will always make sure that a personal injury settlement is made and the case does not reach the courts where an unpredictable jury and a huge amount of risk would be waiting for you.

How Much to Ask For in a Personal Injury Settlement?

Once you have determined how you are going to file your settlement claim, the next issue in your personal injury settlement process is to identify what your personal injury lawsuit settlement amounts to.

You can use a damages calculator that is easily available online to get a ballpark estimate of your compensable damages so you can have a rough idea on what to expect.

In order to receive the best damage compensation, you need to get a sense of how significant your injuries are.

First off, you should hire a personal injury lawyer and then get all your claim-related documents together. Anything that will give you a sense of the personal injury and the losses you have suffered. For example, medical bills, records of work days missed and anything that will give a strong representation of the injury suffered. This will give you an idea about the actual out-of-pocket costs.

Then comes the emotional part of a personal injury. How can we determine how much our feelings are worth? Or how much we have been affected emotionally?

Most insurance companies use a damages multiplier to calculate the more general personal injury damages. This is done by multiplying the amount of your actual damages to a number between 1.5 and 5. The number can be high or low depending on how serious your mental injury is, how much time it will take to recover, who was entirely at fault and the impact these injuries have had on your day-to-day life.

Although this method is commonly used, you should keep in mind that numbers randomly punched into a website cannot confirm what exactly the damages should be for any mental injury as only you can decide the severity of it. Thus, it is important to consider all variables instead of relying just on the damages calculator when wondering how much to ask for in a personal injury settlement.

There is no minimum or maximum amount of settlement when it comes to personal injury. It all depends on the case and the level of risk it possesses. The amount of a settlement in a personal injury case is determined by the following factors:

  1. The nature and extent of the injuries. (Includes pain and suffering and other long term emotional trauma)
  2. Whose fault the accident was.
  3. The willingness of one party to settle the case in court.

In case you receive a settlement offer you do not agree with, you are free to reject it after which negotiations to come to an agreement for the settlement amount will continue between both the parties. If your insurance company is involved then the negotiations will be between your insurance provider and the other party’s insurance company. That is, if they have insurance. However, even though it is true that most personal injury cases are settled before even going to trial, there are still cases where going to the court may be essential.

Reasons to go to trial may include you and the other party not seeing eye to eye about some key elements of what would have been a personal injury settlement such as, who was at fault for the accident or how much the settlement amount should be. In such cases when reaching an agreement seems impossible, a wise option would be to let the legal authorities decide the matter for you.

How are Personal Injury Settlements Paid Out?

In personal injury settlements, there are two kinds of compensation methods that can be paid out: general damages and special damages.

General damages are also sometimes known as non-economic damages whereas special damages are referred to as economic damages.

General damages, or non-economic damages, are more subjective and cannot be easily quantified. They are the losses and harm that stems from an underlying accident or mishap. This included emotional injuries as well as any pain, trauma, loss of enjoyment of life, disfigurement, loss of companionship and other similar harm resulting from the accident and leading the injured party to seek medical treatment.

If you were injured in an accident and you were not at fault, you are required to receive some amount of money for the pain caused to you and the impact the accident has had on your daily life. If you have minor injuries, it may be less as a small “token” amount. However, if injuries are more serious and the pain is long lasting or has long term side effects, the amount will automatically increase.

Special damages are easier to put a dollar figure on as it includes compensation for medical bills, repair costs, lost wages, lost income opportunity and other economic losses resulting from the accident. It can also include the cost of treatment in case of a long term disability. This can easily be calculated by an auto accident settlement formula calculator. However, general damages are much harder to calculate as they cannot be quantified.

Once you have prepared a strategy with your attorney or insurance agent, you will have to prepare a demand letter which will tell your side of the story. This demand letter usually details how the accident occurred, who was involved, how badly you were injured, whose fault it was, what evidence do you have that confirms who was at fault, what medical treatment have you received, etc.

If you reject a settlement offer from the other party, you will have to include the reason behind the rejection in your demand letter. You would also have to counter the initial offer with a dollar amount you would be willing to accept to settle the case and add that in your letter.

How to Collect Personal Injury Settlement?

Once both the parties have come to an agreement on the amount for the personal injury settlement, the next step is to collect the settlement.

The collection of the settlement amount mostly depends on the specifics of your case. If your personal injury is being covered by your insurance policy, your insurance provider would have been communicating with the other party which means you would have only been in communication with your insurance provider either before the lawsuit was even filed or while the lawsuit is ongoing.

Hence, in cases where the insurance company is involved, all you need to do is sign a release form that will absolve the other party from any future liability resulting from the accident that became the basis of your personal injury claim. In return, the insurance company will write you a check of the settlement amount.

However, the entire personal injury settlement process can get pretty complicated if you have filed a claim yourself with no involvement from any insurance company. In such cases, it is difficult to get the defendant to pay the claim. It is especially difficult if your case has gone all the way to trial. Getting a judgement is easier than getting your money. And with no insurance company to act as a mediator, it can get very complicated.

What is The Bottom Line?

The bottom line is, personal injury settlements are encouraged. Instead of going to trial for something as trivial as personal injury that can easily be solved by an out of court settlement, there is no need to waste your time and the other party’s time by being court bound.

Now that you know how much to ask for in a personal injury settlement, you can contact your attorney if you have been in a car accident. The important thing to remember is that you should not be the one at fault for the accident otherwise personal injury protection will not apply.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.