The Ultimate Guide: How Much To Ask for in a Personal Injury Settlement

The National Safety Council reported 62 million preventable injuries in the US in 2021. Around 76.3 percent occurred at home, 11 percent in car accidents, and 3.5 percent in public areas.

Personal injury cases arise from preventable accidents that meet the “but for” causation test. Essentially, the accident would not have happened if not for the actions of a third party.

In most cases, the theoretical basis for personal injury claims is negligence. The liable party is negligent if they failed to exercise reasonable care or acted recklessly, causing harm to others.

An excellent example of this is drunk driving. The driver’s decision to take to the wheel despite their impairment makes them liable for another person’s injuries. 

Your personal injury protection insurance policy will cover your economic losses. However, your insurer will not pay for your pain and suffering. In such cases, suing the driver for negligence is an option.  

Although preventable accidents are common, personal injury can be physically and financially overwhelming. You may incur significant medical expenses and pain and suffering.

Suppose you or a loved one sustained harm in a car accident because of someone’s actions. You may file a personal injury claim for your losses.

But how much compensation should you ask for in a personal injury settlement? This guide will explore the factors in calculating fair compensation and negotiating with insurance companies. It will also discuss frequently asked questions and how to choose a personal injury lawyer for the best results.

Key Takeaways
  • Many factors determine the amount to ask for in a personal injury settlement.
  • Most personal injury cases end in settlements rather than trials.
  • An experienced personal injury lawyer can ensure you maximize your payout in settlement negotiations.

Understanding Personal Injury Settlements

Most personal injury law firms advertise eye-catching amounts they have won for clients. While significant awards are certainly possible, the road to a successful trial is long and arduous. Additionally, only half of the cases that went to trial ended in the plaintiff’s favor.

As a result, 95 percent of personal injury lawsuits filed in the US never make it to trial. The parties either settle the claim outside the court or the judge dismisses their claim.

Nevertheless, the personal injury settlement process is the same as a trial. It involves an agreement between the plaintiff and defendant to end a lawsuit for monetary compensation. You can reach a settlement at any point after filing a lawsuit for a personal injury or wrongful death. In the case of motor accidents, the settlement is between the injured person and the insurance company.

In any case, you must establish the opposing party’s fault and prove the value of your losses. Like with a lawsuit, you must gather proof such as medical records, police reports, and witness statements. You will need the skills and knowledge of a competent personal injury lawyer to build your case.

Personal injury cases in car accidents often involve dealing with insurance companies. They may not require filing a lawsuit to receive compensation. Moreover, all US states except New Hampshire require car insurance to cover personal injury. Fault or tort states require liability insurance, while no-fault states mandate personal injury protection (PIP) insurance.

All other personal injury cases start with filing a lawsuit. The purpose of litigation is to notify the defendants of your intent to sue. It also sets the wheels for discovery, exchanging information to determine if your case has merit. Depending on the case’s complexity, the discovery phase may take weeks to several months.

If you have a strong case, the defendants may want to negotiate a settlement instead of going to trial. Your personal injury attorney will determine the appropriate amount to ask for and negotiate the final payment.

Types of Damages To Ask for in a Personal Injury Settlement

Assurance of a payout is the main benefit of a personal injury settlement, provided you settle on an amount. Likewise, personal injury settlements include the same compensatory damages you might pray for in a lawsuit.

Compensatory damages, as the name suggests, aim to compensate you for your losses and restore your financial well-being. You can also ask for special and general damages in a personal injury claim. 

Special or economic damages are out-of-pocket expenditures you incur, such as medical bills, property damage, and loss of income. Most states do not cap special damages, so it should cover all the costs associated with your injuries.

Some states limit the general damages you can receive. They include compensation for non-economic losses like pain and suffering,  significant disfigurement, and loss of enjoyment of life. Another term for them is non-economic damages.

Suppose you are suing the defendant because they caused the death of a loved one. In that case, you may pray for wrongful death damages. These damages may include medical expenses before death, funeral expenses, loss of income, emotional distress, and loss of consortium. 

Legal standing for filing a wrongful death lawsuit varies by state law. However, the purpose is to compensate the survivors for losing a family member.

Punitive damages are often awarded in high-profile cases. Courts may grant this award if the defendant’s actions were so bad or indicated a complete disregard for others. It is punishment for the defendant, not compensation to the plaintiff, and courts rarely award it.

Types of Personal Injury Settlements

The monetary compensation in personal injury settlements can be a lump sum or structured payment arrangement. A lump sump arrangement means you get the entire agreed sum in one payment. Conversely, a structured deal means you get your settlement in periodic payments as mandated in the Periodic Payments Settlement Act.

One advantage of getting your damages in installments is you have guaranteed income over the long term. This arrangement can help you manage serious injuries requiring extended care or resulting in disabilities. Additionally, it is beneficial in wrongful death cases since you are less likely to mismanage and run out of money when needed.

In some cases, the settlement agreement may be a hybrid arrangement. You can get a specific portion of the settlement at once to cover major medical expenses and the balance over an agreed period.

Regardless of payment arrangement, the awards you receive do not form part of your gross income. Hence, you don’t pay income taxes on the settlement amount. 

Moreover, you may convert a structured settlement to get a lump sum if the need arises by selling the rights to it to settlement funding companies. However, such a sale must have court approval by the court that approved the settlement. 

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Factors That Affect Personal Injury Settlements

Several factors can affect the amount you should request in a personal injury settlement, assuming the defendant is liable. Understanding the following factors can help you make informed decisions and receive fair compensation for your losses.

Injury severity

Typically, more severe injuries result in higher settlements. Broken bones and spinal cord damage, for instance, tend to result in higher payments than sprains or bruises. 

Suppose injuries lead to permanent disability like paralysis. Victims usually anticipate a more extensive settlement due to the significant pain and suffering. Similarly, conditions such as disfigurement, brain trauma, or permanent body part loss typically lead to more compensation.

Disruption to normal life

Negligent accidents can happen in an instant, and they can have life-changing consequences.

Suppose an accident resulting in brain injury interferes with the daily life of the victim. You can ask for more compensation in a personal injury settlement. For instance, your injuries keep you from walking, standing, returning to work, or pursuing your hobbies. In any of these cases, you are eligible for a larger payout.  

Treatment and recovery periods

Personal injury settlements typically rise when post-injury medical treatment requires the attention of doctors or confinement in hospitals. Cases that entail reconstructive or other surgeries also carry higher compensation.

Aside from active medical treatment, your settlement depends on recovery. Some people have a shorter recovery period after an accident, while some take longer than others. Victims that require extended recovery periods and rehabilitation can get higher settlement amounts.

Emotional and mental suffering

Most accidents can cause emotional and mental suffering that can be as severe as physical injuries. It can take the form of anxiety or depression that can debilitate the victim. You can request more compensation for this type of suffering when negotiating a settlement.

However, it’s challenging to prove psychological distress. It often requires input from mental health professionals to demonstrate the presence of emotional and mental trauma and its long-term consequences.

Risk of reputational damage

Some of the most significant settlements are from big companies that cannot risk bad publicity from a personal injury case. Rather than going through a trial that can damage their reputation, they prefer to settle it out of court. You and your lawyer can use this as leverage when requesting compensation for your personal injury claim.

Litigation costs

The expenses associated with preparing for a case can rapidly accumulate for defendants, particularly in complex cases. Some defendants or insurance companies want to avoid that by settling the matter outside the court. The same can be said for plaintiffs with limited means. 

Some victims might accept lower settlements to avoid litigation expenses. Of course, many personal injury lawyers work on contingency, so defendants with deep pockets are less likely to have leverage in this aspect.

Legal milestones

The settlement value tends to go up when a case reaches critical points. The legal milestones may vary but typically involves overcoming a motion to dismiss or conducting a significant deposition.

Each time the court rules in your favor, you have more leverage in negotiating a settlement. In some instances, defendants may want to protect certain secrets from coming out in discovery and settle before that happens.  

Experienced personal injury attorneys can pressure the defendant to settle before such an event occurs. Your lawyer might persuade the opposing party to play ball if they are uneasy about overcoming the next milestone.

Calculating Settlement Amounts in a Personal Injury Case

Determining how much to ask for in a personal injury settlement is complex, evidenced by the number of factors to consider. A defendant’s lawyer or insurance company may calculate the personal injury claim using two methods: the multiplier and per diem methods.

The multiplier method involves multiplying the accident victim’s economic damages by a number, or multiplier, based on the injury’s severity. It can range from 1.5 to 5. Suppose the victim’s medical expenses and lost wages total $50,000, and the defendant uses a multiplier of 2. In that case, the personal injury claim’s value would be $100,000.

In the per diem method, you assign a monetary value for each day the injury affects a victim. For example, suppose the victim’s economic damages are $50,000, and their recovery period is 100 days. The personal injury claim’s value would be $500 per day.

However, these methods typically consider only the victim’s economic losses. They do not assess the non-economic damages, such as emotional trauma and loss of enjoyment of life. Quantifying them requires the help of expert witnesses and additional evidence to support the value of your claim.

Given the complexity of personal injury claims, the amount to ask for depends heavily on the circumstances of the case. Trends revealed in recent studies put the average personal injury settlement amount at $52,900. However, the payouts can be as little as $3,000 and as much as $75,000.

They might not seem like much, but that is the nature of the settlements. They tend to be lower than a verdict because it’s a compromise. The goal is to guarantee a payday for victims. 

Know How Much To Ask for in a Personal Injury Settlement

Determining the appropriate amount of compensation to ask for in a personal injury settlement is complicated. You must consider several factors and gather relevant evidence to support your claim.

It would be best to hire a skilled lawyer to negotiate on your behalf. They can provide legal advice on your options and help you get fair compensation based on your circumstances. Additionally, an experienced personal injury attorney can help you assess the value of your claim.

Visit The Personal Injury Center to learn more about personal injury claims and a lawyer’s role in lawsuits and settlements. You can also submit to a free case evaluation to find personal injury lawyers to help on your case.

Negotiating a personal injury settlement requires considerable skills and legal knowledge. Visit The Personal Injury Center to learn how to get fair compensation for your losses.

FAQs for How Much To Ask for in a Personal Injury Settlement

It depends on your financial situation, needs, and goals. An experienced personal injury attorney can discuss the pros and cons so you can make an informed decision.

If you have a lawyer, you must pay attorney's fees. Typically, you will pay 33 percent if they work on contingency. If you don't have a lawyer, you still must pay court costs and evidentiary expenses. If you have a medical lien, the defendant usually deducts those from your settlement check.

Most people confuse settlements with verdicts. A settlement is an out-of-court agreement between the opposing parties in a lawsuit. In contrast, a verdict is a court decision made by a judge or jury determining compensation the defendant must pay the plaintiff. 

Although settlements are not decided by a judge or jury, they must still be approved by the court. This approval is necessary to ensure the terms are according to the law.