The typical personal injury settlement value varies depending on the specific factors and circumstances of each claim. A personal injury valuation is determined by many criteria, including the degree of the bodily damage, the kind of injury, the amount of available insurance coverage and the jurisdiction in which the case is being handled. There is no such thing as an “average” settlement amount. Settlements for minor injuries, such as soft tissue injuries or bruising, may vary from a few thousand dollars to tens of thousands of dollars. Settlements for more serious injuries, such as lifelong disability or long-term medical issues, may reach hundreds of thousands, if not millions, of dollars. As mentioned, the amount of compensation given is also determined by the facts of the case. For example, if the defendant was plainly at fault and behaved carelessly or maliciously, the settlement sum may be increased. If the plaintiff was partly to blame, compensation might be decreased. Ultimately, depending on the individual circumstances of each case, the typical personal injury compensation might vary from a few thousand dollars to millions of dollars.
Why Individual Case Factors Result in Varying Settlements?
Several factors affect the final settlement of a personal injury case, including the following:
- How badly you were injured. The worse your injuries and the longer they take to heal (f ever), the higher your medical expenses and the greater the impact on your ability to work or care for your family.
- Whether you were rendered disabled. If the accident results in a permanent disability, your non-economic compensation is usually higher to account for these harms and losses.
- Whether you can live independently. Some people may require accommodations in a skilled nursing facility or assisted living facility. Your settlement can cover these costs.
- The limits of the defendant’s insurance policy. The at-fault party’s insurance provider pays most personal injury settlements. The amount you receive may be affected by the limits of the liability policy.
How To Calculate the Cost of Pain and Suffering?
It can be hard to quantify non-economic compensation for pain and suffering and harder still to place a dollar value on your mental well-being. Many personal injury attorneys use one of two methods to calculate the cost of pain and suffering. The multiplier method of calculating your pain and suffering compensation starts with your total economic losses. Your attorney tallies your economic losses and then multiplies them by a factor based on the severity of your losses to determine your total compensation amount. The per diem method assigns a daily rate to the number of days your life is affected by the pain and suffering from your accident injuries. The daily rate is multiplied by the number of days your injuries and pain affected your life. For example, if your per diem rate is $200, and your accident leaves you in pain for 50 days, your non-economic compensation would be $10,000.
What Formula Do the Courts Use for Pain and Suffering?
Sometimes claimants and insurance companies cannot reach a settlement agreement. One of the most common areas of dispute is pain and suffering, which is subject to less precise calculation and greater interpretation than the more hard-and-fast economic damages. At trial, the court is not obligated to use a particular formula when assessing pain and suffering damages. Rather, the pain and suffering calculation will be made on a fair and reasonable basis according to the evidence. Insurance companies know that the math changes if your case goes to court. Awards for damages can be much higher at trial than what they would have been if the case settled. Nonetheless, it is not uncommon for insurers to hold out and refuse to settle if they think they can win in court or believe that their assessment of contested damages (such as pain and suffering) is accurate. The key to reaching a favorable settlement often rests on your personal injury lawyer’s ability (should you decide to hire one) to persuade the insurance company that any lowball settlement offer will not withstand a court’s scrutiny.
How Much Is a Personal Injury Lawsuit Worth?
There’s a joke that most law school students hear early on: the answer to every legal question is “it depends.” When it comes to figuring out the value of a personal injury lawsuit, unfortunately, the old law school joke holds true. It depends on the specific facts and circumstances of the case.
Typical Settlement Amounts
Every personal injury lawsuit has different factors which make it nearly impossible to determine with any precision how much a specific personal injury settlement will be worth. Because settlement amounts can vary based on every factor involved in a case, it can be difficult to predict a case’s value.
A study by the Bureau of Justice Statistics in 2005 found that:
- Half of all plaintiffs received $24,000 or less.
- The median amount awarded in auto accident cases was $16,000.
- The median award in premises liability cases- cases involving injuries sustained due to the condition of the property- was $90,000.
- The median payout for product liability cases- cases involving flawed products like faulty brakes or dangerously designed toys- was $748,000.
- The median award was $31,000 for all cases studied.
Keep in mind, however, that this study was from nearly 20 years ago. The study also found that the average success rate for plaintiffs was only about 50%, making it entirely possible that a plaintiff wouldn’t get any settlement or other payment at all.
How Are Personal Injury Settlements Paid Out?
Personal injury settlements are usually paid out in one of these ways:
- A lump sum settlement is a one-time payment provided in full to the plaintiff that resolves all claims originating from the accident.
- A structured settlement is a sequence of payments provided to the plaintiff over time, which may be made in regular installments or in a single amount.
- A Medicare Set-Aside (MSA) is a part of a settlement set aside to compensate for future medical bills linked to the injury.
- An escrow account is a third-party neutral account that stores settlement payments until they are distributed to the plaintiff.
- The manner of payment is often flexible between the parties. It may be impacted by various circumstances, such as the amount of the settlement, the plaintiff’s future medical expenditures, and tax concerns.
