What is a Typical Car Accident Settlement Amount?
The Insurance Information Institute reported that in 2017 the average auto liability claim for bodily injury was $15,270 and $3,638 for property damage.
According to the Rocky Mountain Insurance Information Association, in 2013 the average bodily injury car accident settlement was $15,443.
To get an idea of what these cases are worth when they go before a jury, the National Center for State Courts published data collected in 2001 from several counties throughout the United States, including Bexar, Dallas, El Paso, and Harris counties, that calculated the median jury award for motor vehicle accidents. The median jury award for motor vehicle accidents was $17,544.
Unfortunately, these figures don’t tell us much. Since car accident injury settlements are so fact intensive, an average doesn’t provide much help in regard to what a particular case is worth.
As discussed below, there are several factors that go into valuing a car accident injury settlement case. Only through experience can someone know how to value a car accident injury case properly. If you feel that the insurance company is undervaluing your case, it’s best to consult an experienced Houston car accident attorney.
Don’t Trust “Magic” Formulas or Online Settlement Calculators
Many car accident injury victims will Google what a typical or average car accident settlement amount would be for their specific situation. This search will yield many results with websites claiming to give an exact calculation or formula to determine a typical settlement amount for a car accident injury case.
Most common is the calculation of taking the dollar amount of the medical bills and lost wages of the injured victim and multiplying it by some arbitrary number (1.5-5) to arrive at a pain and suffering dollar amount, then adding the total amount of medical bills, lost wages, and pain and suffering together.
However, this is almost always inaccurate. Neither insurance adjusters nor Texas juries are instructed to use this method to calculate the value of any car accident injury settlement or award. This practice arose in the past from both insurance adjusters and personal injury attorneys “guesstimating” an amount of where an appropriate settlement amount would be for usually minor, soft tissue injuries (e.g., whiplash).
The reality is there is no formula or calculator that can provide an actual car accident settlement amount. There are simply too many variables involved in each case to accurately calculate an average or typical car accident settlement amount.
However, there are factors that you should know that can affect the value of your case, such as the amount of your “damages,” the calculation of pain and suffering, and other relevant factors. An overview of these points are discussed below, as well as real car accident injury case settlement examples from several different counties in Texas.
Before delving further into the discussion of typical or average car accident settlement amounts, it’s important to know what exactly a “settlement” is.
What is a Settlement?
A settlement is an agreement between parties of a legal dispute which resolves the dispute prior to either filing a lawsuit or proceeding further after a lawsuit is filed.
The parties usually agree to settle the underlying dispute for a dollar amount in exchange for releasing the liable party from any further liability.
In the car accident context, the liable party’s insurance company would agree to pay the injured party a sum of money in order to release their insured from any further liability.
The settlement amount will be an amount both parties feel is fair to settle without proceeding further in the dispute and avoiding further litigation expenses.
Keep in mind, insurance companies are businesses with a main goal of maximizing profits. This means they will do their best to pay out as little as possible in settling claims. Depending on the facts of your case, accepting a settlement may make sense. However, there are situations where filing a lawsuit and going all the way to trial is necessary to achieve top dollar for your case.
Most Important Factor in Determining Typical Car Accident Settlement Amounts
One of the most important factors in determining a typical car accident settlement amount is knowing what your “damages” are. Damages are a term of art in the law meaning the calculation of losses realized in a personal injury case.
You must be able to prove damages in order to receive fair value for your car accident injury case. There are two main types of damages, including Compensatory Damages and Punitive Damages, in addition to other sub-categories of Compensatory Damages which are broken down below.
Compensatory Damages, also known as “actual damages,” are the monetary compensation that are awarded to an injured victim as a result of an accident caused by someone else’s negligence. Compensatory damages are intended to put the injured party back to where they were before the accident and make them “whole.”
Special Damages or “Specials” are a type of compensatory damages that are quantifiable, such as past and future medical expenses, past lost wages and loss of earning capacity, and other out-of-pocket expenses.
You prove these damages by presenting evidence such as medical bills, paycheck stubs, W-2s, or simply a letter from your employer detailing the amount of lost time, your salary, your position at the company, and how many hours you usually work. Lost wages include the time you missed from work and weren’t paid, as well as sick time and vacation time used as a result of the accident.
General Damages, also known as non-economic damages, are another type of compensatory damages that are difficult to quantify. According to Texas Civil Practice and Remedies Code Section 41.001(12), non-economic damages include:
- Physical pain and suffering;
- Mental or emotional pain or anguish;
- Loss of consortium;
- Physical impairment;
- Loss of companionship and society;
- Loss of enjoyment of life;
- Injury to reputation; and
- All other nonpecuniary losses of any kind other than exemplary damages.
Due to the difficulty in calculating General Damages such as physical pain and suffering, mental anguish, or loss of enjoyment, insurance adjusters use software such as Colossus and Claims IQ to place a value on each car accident injury claim.
Adjusters enter in injury codes, medical billing codes, and other “soft” factors such as loss of enjoyment and a settlement range is spit out. The adjusters are usually bound to this range unless you can provide them with any new information.
Most often these settlement ranges allocate very little to any compensation for General Damages, especially in “soft tissue” injuries (e.g., whiplash, sprains, strains, and bruises). They may not even offer enough to cover your medical bills. It’s situations like these you’ll need to consult with an experienced car accident injury attorney.
Punitive damages, also known as exemplary damages, are damages awarded as a penalty or by way of punishment but not for compensatory purposes.
They may be awarded only if the claimant proves by clear and convincing evidence (i.e., the highest burden of proof in a civil case) that the injury resulted from fraud, malice, or gross negligence. If you’re a victim of a hit and run or drunk driving accident, you may have a claim for Punitive damages for your car accident injury settlement.
There is a limitation on the amount of punitive damages awarded, if you file a lawsuit and your case goes to trial. They may not exceed an amount equal to the greater of:
- This calculation:
- Two times the amount of economic damages; plus
- an amount equal to any non-economic damages found by the jury, not to exceed $750,000; or
Calculating Pain & Suffering for Your Car Accident Settlement
While searching online for typical car accident settlement amounts, you’ll most likely find two common methods to calculate the pain and suffering portion of your settlement. These are the “Multiplier” and “Per Diem” methods. However, as mentioned above, the Multiplier and Per Diem methods are almost always inaccurate.
Although insurance companies may use some type of multiplier in their computer programs as a method to calculate pain and suffering, those algorithms are proprietary and are kept confidential.
As discussed above, the multiplier method is mostly a tool for car accident attorneys to use in order to arrive at a pain and suffering dollar amount that may be demanded within the demand letter package.
A multiple of 1.5 to 5 of Special Damages is usually used with 1.5 being the least severe injury (e.g., whiplash) and 5 being the most severe injury (e.g., traumatic brain injury) as the amount of pain and suffering that is claimed.
Per Diem Method
The Per Diem method is another method used to calculate pain and suffering in a car accident injury settlement. The number of months, days, or hours are multiplied by a certain dollar figure that is either equal to the amount of pay the injured party receives in their job for that specific time period or some other arbitrary number.
For example, if the accident victim has suffered pain for 200 days from the accident and made $200 per day as a construction worker, the pain and suffering calculation would equal $40,000. The idea behind using a daily salary rate calculation as the daily rate of pain and suffering is that it could be thought that the pain associated with an injury is comparable to the effort of working a job.
Although the Texas court in Hernandez v. Baucum, 344 S.W.2d 498, 500 (Tex. Civ. App. 1961) ruled that it was a “fair argument and a rational approach for pain the way it was endured, month by month, and year by year,” in proposing a pain and suffering calculation to the jury at trial, it is not an accurate estimate of what the value of pain and suffering will be assigned in a car accident settlement.
Damages and Pain & Suffering
As you guessed, it’s extremely difficult to place a specific dollar value on something as subjective as someone’s pain and suffering. Juries are tasked with the same difficult challenge. They’re simply asked what sum of money would fairly and reasonably compensate the plaintiff for the physical pain and mental anguish sustained in the past and future.
Juries responses to this question are as varied as you can imagine. Even in the exact same case, it’s extremely unlikely that two jury panels will answer this question with the same answer. As you can see, forecasting what a jury would allocate to pain and suffering in a particular case is challenging. Insurance companies realize the difficulties involved in predicting jury verdicts.
Their response was to develop a predictive system based on data of past jury verdicts, settlements, and other criteria they’ve gathered to attempt to extrapolate some sort of statistical trend in pain and suffering expected values.
Although every insurance company may have their own individual pain and suffering value inferences on what value to place on a particular claim, general correlations are evident. A commonality among these inferences is a positive correlation between the amount of the Special Damages, the severity of the injuries, and pain and suffering compensation.
This means that, typically, the greater the amount of medical bills and lost wages, the more pain and suffering compensation is given. Similarly, the more severe the injuries, the greater the amount of pain and suffering compensation. For example, a broken bone will yield greater pain and suffering compensation than whiplash.
How to Prove Your Pain & Suffering
Ways to prove your pain and suffering compensation and move the needle in your overall settlement include providing the insurance company with hard and soft factors that prove you are experiencing such mental and physical symptoms.
This includes providing them with medical records and bills that contain narratives from your healthcare providers that your injuries have severely impacted your life. Statements written by your supervisor at work, your co-workers, family, and friends stating this very same thing will also help prove pain and suffering.
Your own statements expressing the loss of enjoyment you’ve suffered as a result of the accident, being as specific as possible, is also necessary. For example, you can describe how you can no longer work-out, play with your children, or perform household chores like you did before the accident.
Factors Affecting Car Accident Settlement Amounts
Although there may not be an exact formula or calculation that will give you a typical car accident settlement amount, there are many factors that can come into play in how your case is evaluated by the insurance company and a jury. These factors are:
- Facts of your case: The facts of your case obviously matter. This may include: the amount of damage to your car; venue–which Texas county your case may be filed; whether you have an independent witness or other evidence to prove the other party’s negligence; whether liability is contested; whether you were wearing your seat belt; or any other facts that may help or hurt your case.
- Medical treatment: The amount of medical treatment definitely affects the value of your settlement. If you went to the emergency room directly from the scene of the accident by ambulance and then immediately followed up with medical treatment either with your primary care doctor or another health care provider, this will positively affect your case. Consistent medical treatment substantiated by medical bills and records is one of the most significant factors in calculating a car accident injury settlement.
- Severity of injury: Just as important as medical treatment, the severity of injury is also as significant in determining a settlement value. Obviously, the more severe the injury, the greater the value of the case, with all other things being equal.
- Insurance policy limits: The defendant’s insurance policy limits can heavily affect the amount of your car accident settlement. If the defendant only has a minimum policy, which is $30,000 per person and $60,000 total per accident in bodily injury coverage in Texas, and you do not have underinsured motorist coverage, you’ll likely only be able to receive those amounts, given your damages justify receiving a policy limits settlement. The alternative, of course, is to sue the defendant and seek all of your damages. However, this may be fruitless with a defendant that is insolvent.
- Prior claims: Part of every insurance company’s claim investigation is the prior claims search. They search for the injury victim’s claims history. If they find that the injury victim has a track record of filing claims, they’ll use this as justification to decrease the value of a claim or deny it completely. If they find too many prior claims or if they sense something fishy with the claim at issue, they may transfer the claim to their fraud department known as the Special Investigative Unit.
- Insurance company: Just like every product and service on the market, insurance comes in varying levels of quality. There are bargain basement type insurance companies that usually only write minimum coverage, “named-driver” policies that do their best to deny every claim that comes through the door. The good news is as of January 1, 2020, these “named-driver” policies are no longer legal in Texas. Until then, if you’re unlucky enough to deal with these types of insurance companies, it’s best to hire a car accident attorney.
- Comparative negligence: Texas follows the Modified Comparative Negligence rule in car accident cases. This means that if you are partly responsible for the accident, your damages that are recoverable will be reduced by the percentage of your liability. For example, if you were 50% to blame for an accident and your total damages were $100,000, you will only be able to recover 50% of your damages, or $50,000. Also, under this rule, if you’re more than 50% at fault, you are barred from recovery completely.
- Health insurance / Medicaid / Medicare: If your health insurance, Medicaid, or Medicare paid for some or all of your medical bills, this may negatively affect the value of your car accident injury settlement. Texas Civil Practice and Remedies Code Section 41.0105 and Texas Supreme Court cases Haygood v. DeEscabedo and Daughters of Charity Health Serv. of Waco v. Linnstaedter addressed situations where a collateral source, such as health insurance paid a reduced amount for medical bills for an injured party and how that will affect the injured party’s case value. According to Haygood, recovery of medical bills paid by these sources, is limited to the amount that is actually paid or incurred by or on behalf of the injured party. In other words, if your health insurance, Medicaid, or Medicare pays a reduced amount for your medical bills, the amount of your claimed damages can be reduced.
- Plaintiff’s profile: The plaintiff’s background such as their prior medical history and whether they have any preexisting medical conditions can have a large impact on the settlement amount. In addition, the plaintiff’s age, gender, employment, criminal history, and physical appearance can also impact the settlement amount. The plaintiff’s age may affect the amount of certain damages that are recoverable, such as whether the injury was an aggravation to a preexisting medical condition (e.g., degenerative disk disease). The plaintiff’s gender and profession may come into play on how the insurance company may view the strength of the injured party’s case in front of a jury. Juries tend to sympathize with female plaintiffs. Juries also view certain professions as being more credible (e.g., nurses). These facts affect the overall value of a car accident settlement.
- Defendant’s profile: Just as juries tend to view certain characteristics of the plaintiff negatively or positively, this is true with the defendant’s background, as well. Other important factors about the defendant’s background such as their driving record and whether the defendant is a company will heavily affect the amount of your car accident settlement. Cases where the defendant is a company, tend to be worth more.
- Aggravating factors: If the defendant was driving while intoxicated or the accident was a hit and run, the insurance company will be more willing to set aside a larger amount of funds for settlement to avoid paying potential punitive damages at trial given their insured’s gross negligence. The risk is definitely greater for insurance company’s in these types of cases. Therefore, the value of these types of cases are greater.
Actual Car Accident Settlements
Below is an overview of Texas car accident injury cases settled after a lawsuit was filed. Keep in mind that most car accident injury cases settle before a lawsuit is filed. Sometimes filing a lawsuit is the only way to get fair value for a case. When a lawsuit is filed on any case, the risk increases for the defendant and the insurance company. Therefore, the insurance company tends to place a greater value on the case.
Most of the cases below involve a common injury in most car accident cases–disc herniation. As you’ll see, settlement amounts vary quite a bit depending on the factors discussed above.
Bridges v. Mid South Extrusion, Inc.
- Facts: Plaintiff was driving a pickup truck and was struck on the driver-side door by an out-of-control vehicle pushed by Mid South Extrusion, Inc.’s 18 wheeler, driven by Dewayne Wooten. Mr. Wooten was allegedly texting immediately before the crash.
- Injury: Disc herniation at C5-6, C6-7, with nerve impingement, headaches, cervical radiculopathy
- Medical Treatment: Emergency room visit, chiropractic treatment, physical therapy, MRIs, Epidural Steroid Injections, and Anterior Cervical Discectomy with decompression at C5-6 and C6-7.
- Medical Bills: $221,115.76
- Insurance Company: Travelers Insurance
- Settlement Amount: $1,525,000
Vessel v. Raheem
- Facts: Plaintiff was driving her Honda Accord east on Beechnut Road in Houston when Hudhaifa Raheem, driving a Honda CR-V, attempted to make a left turn in front of her, causing the accident.
- Injury: Disc herniation at C3-4, C4-5, and bulging disc at L4-5.
- Medical Treatment: Chiropractic treatment, MRIs, and Lumbar Epidural Steroid Injection.
- Medical Bills: $56,626
- Insurance Company: Allstate
- Settlement Amount: $22,930.
Boma v. Delgado
- Facts: Ngand Boma, a pedestrian, was walking on the sidewalk with his son in Dallas, and crossed a parking lot where the sidewalk ended. Mr. Boma claimed that Jose Delgado pulled into the parking lot, failed to yield to him and his child, striking Mr. Boma on his left side.
- Injury: Disc herniation at L5-S1 and lower back and left hip pain.
- Medical Treatment: Chiropractic treatment and physical therapy.
- Medical Bills: Unknown
- Insurance Company: Hallmark Insurance
- Settlement Amount: $15,000
Mozelewski v. Gaines, Young
- Facts: Plaintiff was driving her 2001 Chrysler Sebring on I-30 in Dallas when she was rear-ended by a 1990 Jeep Cherokee driven by Gene Gaines. Ms. Mozelewski sued Mr. Gaines and Judy Young, the owner of the vehicle.
- Injury: Disc herniation at C3-4, with cord compression.
- Medical Treatment: Emergency microscopic C3-4 Anterior Cervical Discectomy and spinal cord decompression.
- Medical Bills: Unknown
- Insurance Company: Geico
- Settlement Amount: $225,000
Henry v. USAA
- Facts: Plaintiff was driving her 2015 Mercedes-Benz GLK in San Antonio. She stopped in traffic and was rear-ended by a Ford F-150 truck registered to Christopher McKenzie. Ms. Henry settled with Mr. McKenzie for his $30,000 policy limits, and was paid $10,000 in personal injury protection benefits and sought underinsured motorist benefits from her own carrier, USAA.
- Injury: Cervical and lumbar disc herniation; shoulder, upper arm and wrist sprain; cervical pain; and lumbago.
- Medical Treatment: Chiropractic treatment, physical therapy, and cervical Epidural Steroid Injection. Surgery recommendation of a laminectomy at L5-S1.
- Medical Bills: $24,059.82
- Insurance Company: USAA
- Settlement Amount: $60,000
Nonken v. Cuevas
- Facts: Plaintiff was a passenger with his wife driving on Highway 281 near the intersection of Loop 1604 when they were rear-ended by a van driven by Arturo Cuevas. Mr. Nonken sued Mr. Cueva and his insurance company tendered its $100,000 policy limits. Mr. Nonken then sought underinsured motorist benefits from his own carrier, State Farm Insurance.
- Injury: Disc herniation at C4-5, C5-6, C6-7.
- Medical Treatment: Anterior Cervical Discectomy and fusion at C4-5, C5-6, and C6-7.
- Medical Bills: Unknown
- Insurance Company: State Farm Insurance
- Settlement Amount: $260,000
Schmidt v. Salas Construction Inc, Valdez
- Facts: Plaintiff was driving a pickup southbound on I-35 in Austin, when he was rear-ended by a dump truck driven by Arturo Salas Valdez who was working in the scope of his employment with Salas Construction, Inc.
- Injury: Disc herniation at C3-4, pressing on his spinal cord, and radiating pain.
- Medical Treatment: Single-level Anterior Discectomy and fusion.
- Medical Bills: $14,029.84
- Insurance Company: Safeco
- Settlement Amount: $400,000
Trautman v. BHL International, Inc., Mills
- Facts: Plaintiff was driving a mid-size sedan on I-35 near the University of Texas in Austin when he was rear-ended by Patricia Mills in a full-size SUV owned by BHL International, Inc. Ms. Mills had borrowed the car from BHL’s president’s son.
- Injury: Small lumbar disc herniation, nerve impingement in the lumbar spine, and neck and back sprains and strains.
- Medical Treatment: Chiropractic treatment, physical therapy, MRI, Epidural Steroid Injections, Facet Block Injections, one-level lumbar fusion. Extension of fusion to adjacent levels recommended in the future.
- Medical Bills: $108,000
- Insurance Company: Allstate
- Settlement Amount: $950,000