One of the first questions people ask when opening a personal injury claim is how much they would actually be able to recover. There are many variables that go into that answer and each case is different from the last. However, there are ways to look at how those variables have affected the outcome of other cases to estimate possible outcomes for your own. Most cases settle out of court and the settlements amounts are often kept confidential, but a personal injury attorney can go over the details of your case and draw from their own experience to get an idea of how much your case might be worth.
Are Personal Injury Settlements Common?
Going to trial is time consuming, expensive, and often risky for all parties involved. Because of this, most lawyers and insurance companies prefer to settle claims out of court. Approximately 96% of cases settle without having to go to trial [1]. This is why it is good to make every effort to negotiate a good settlement out of court but be prepared to go to trial if necessary.
Other Personal Injury Lawsuit Outcomes
In 2005, the Bureau of Justice Statistics determined that approximately 51.6% of all tort cases that went to trial [2] were won by the plaintiff. Individually, motor vehicle accidents had the highest rate of success for plaintiffs at 64% and medical malpractice had the lowest at 22%. There is also the possibility of the judge dismissing the case entirely for a number of reasons.
What is an Average Personal Injury Claim Settlement?
There is no real definitive average for personal injury settlement amounts. It is such a wide range dependent on so many variables that even if a number could be calculated, it would not be an accurate representation of what to expect. Some of the major variables that impact a settlement amount include:
- Extent of injuries
- Cost of medical treatment
- Pain and suffering
- Loss of income
- Future costs and expenses
- Property damage
- Percentage of fault
- Extent of policy limits
- Personal wealth of defendant
- Number of plaintiffs
There were several historical studies that were done to determine some averages for different personal injury claim types but those are outdated by close to 20 years and are not in line with current estimations for personal injury cases now. A more recent 2017 analysis [3] of voluntary respondents and their personal injury claim payouts indicated that:
- 53% received under $10K
- 21% received between $10K-$25K
- 10% received between $25K-$75K
- 16% received over $75K
What is the Average Personal Injury Settlement for Different Types of Accidents
One of the biggest factors that determines a personal injury outcome is the type of accident. This is largely due to the resulting injury that is caused by the different types of accidents. A settlement for getting in a car accident will be drastically different than a pedestrian collision or a slip and fall. In the event of a pedestrian getting hit by a car, the outcome could result in catastrophic injury and wrongful death while a slip and fall might result in a minor back injury. Even variations of motor vehicle accidents are a good example of how different circumstances can affect a personal injury settlement. A rear end collision during rush hour is going to result in less damage than a head on collision at top speed. While much of the data that helps determine average settlements by accident type are held by insurance companies and not available to the public, there are some studies and surveys that provide the public with some insight.
- Surveys as recently as 2020 [4] indicate that the average car accident settlement is between $20-$25K.
- Insurance information indicates that the average insurance claim for dog bites was ~$65K in 2022 [5].
- Data published by Thomson Reuters shows that median motorcycle accident payouts after trial reached roughly ~73.7K [6].
- According to the National Safety Council, the average cost for workers comp claims in 2019 – 2020 was roughly $41.5K [7].
- The average settlement for slip and fall claims in California range between $15K – $50K [8].
What Types of Personal Injury Lawsuits Pay the Most?
Accidents that result in major or permanent damages are often more likely to settle for higher amounts depending on the circumstances. Disabilities, fatalities, permanently diminished quality of life, and long-term pain and suffering can result in higher compensation in many cases. There are no specific types of accidents that carry higher settlements, and no guarantee that any situation will yield a particular result. But the higher the cost of the damages, the higher the amount that needs to be compensated.
What is a Good Personal Injury Settlement Amount?
The idea of personal injury compensation is to make the victim whole again. A good settlement is one that covers all of the costs and expenses incurred by the accident and helps the plaintiff move on with their life. These can be economic costs such as medical bills and property damage, or non-economic things like reduced quality of life and emotional distress.
What Affects the Outcome in Personal Injury Lawsuits?
There is a variety of factors that can impact the final outcome of a personal injury case. Some of these are obvious from the beginning while others occur or become evident later on. They are also often interconnected and affect each other. Some of the common major factors are listed below.
Severity of Injury
The severity of the injury suffered gives an idea of the extent of medical treatment the person will need. For personal injury cases, injuries are often categorized into three groups:
- Tier One – The most extreme such as damage to the spine or brain, permanent disability or disfigurement, and fatalities.
- Tier Two – Medium severity such as broken bones, wounds that require stitches, and injuries that require surgery.
- Tier Three – Minor soft tissue damage such as scrapes and bruises, strains and sprains, and things like whiplash.
Individual factors such as the victim’s age, health, and personal situation can also affect the severity of injuries from person to person. Minor cuts and bruises can be a much more serious injury for someone with hemophilia. Furthermore, it is not just the type of injury, but also the extent of treatment needed and the impact on the person’s life. A sprained wrist can be a devastating injury for someone who makes their living as an artist.
Pain and Suffering
Things like pain and suffering or emotional distress are extremely personal and can be difficult to pin down as a financial value. There are many things to consider when calculating the impact of pain and suffering for personal injury claims:
- The severity of the pain
- The length of time suffered
- Type of treatment needed
- Amount of treatment needed
- Impact on daily life
- Impact on physical health
Immediately after an accident, it might not be obvious that pain management and psychological care are going to be needed. This is something that can impact the outcome of the case later on.
Medical Bills
Healthcare is expensive. One of the biggest concerns for most personal injury victims is the cost of medical treatment. There are many medical expenses that can be incurred after an accident such as:
- Ambulance rides
- ER visits
- Scans and imaging
- Lab work
- Medications
- Casts and sutures
- Equipment
- Follow up visits
- Specialist consultations
- Injections and Surgeries
- Physical therapy
Generally, personal injury attorneys will help their clients receive medical care on a lien basis. This means that the client does not pay the doctor out of pocket at the time of treatment, but instead, the bills are paid out of the final settlement at the end.
Lost Wages
As part of settlement negotiations, a plaintiff can ask to be compensated for time lost from work due to the accident. This can be time already missed as well as time that will be missed in the future. A personal injury attorney may also argue that the plaintiff’s future earning ability may be negatively impacted. If a person suffers an injury that permanently puts them out of work, they may claim loss of earning capacity. If a person has dependents, their compensation may be considerably higher.
Loss of Opportunity
While recovering from an injury, there may be many things that you may not be able to do that you would have done had the accident not occurred. A person may miss out on business deals and job promotions that they otherwise could have benefited from. In these types of situations, the monetary loss of that opportunity can often times be calculated into an amount that can be sought in the personal injury claim.
There are other circumstances that may warrant a reward due to loss of opportunity. One example of these circumstances is when a person’s family files for loss of consortium. If someone is killed in an accident or injured severely enough to diminish their capacity to provide companionship for their loved ones, their family may file a separate claim for loss of consortium.
Insurance Coverage
An insurance company can only pay as much as the individual policy allows. Since insurance is one of the primary methods of paying out a personal injury claim, the limits of the policy can heavily impact how much the victim will be able to recover. In situations like a car accident, the plaintiff may have uninsured or underinsured motorist coverage that can supplement a defendant’s low policy limit. Claims against companies may have a better chance at a higher settlement due to higher policy limits.
Defendant’s Assets
A defendant can’t pay money they don’t have. Sometimes it doesn’t matter how much money a settlement should be if the defendant simply can’t afford it. Occasionally, the court may liquidate their assets and garnish their wages, but that is still limited by how much the defendant has. When negotiating a settlement, the extent of the defendant’s assets and insurance coverage can be a defining factor.
Fault
The state of California follows the Pure Comparative Fault rule. This means that if the plaintiff was also at fault for the accident, the amount they can recover is reduced by the percentage of fault that they share. This means that if a case is going to settle for $100k and the plaintiff is found to be 25% at fault for the accident, they will only be able to recover $75k. Some states follow other rules regarding the plaintiff’s liability and their ability to recover damages, so it is important to know which rules apply to you.
Trial
Sometimes, going to trial is necessary and unavoidable, but it is something that most personal injury lawyers and insurance companies alike try to avoid. It is a stressful, expensive, and lengthy process that should only be undertaken when the benefits outweigh the costs and the risks. Sometimes, the higher amount recovered goes directly into paying for the litigation process. There is also the chance that the case could be lost, and the plaintiff could walk away with nothing at all. Personal injury attorneys are always assessing these risks and benefits when undergoing settlement negotiations.
Laws That Can Reduce Your Personal Injury Settlement
There are various laws that may limit a settlement amount.
- Comparative negligence can reduce the total recovery amount if the plaintiff shares a percentage of fault for the accident.
- In motor vehicle accidents within California, Proposition 213 prohibits victims who were driving while uninsured at the time of the accident from recovering any non-economic damages such as pain and suffering.
- California also places a cap on such damages in medical malpractice cases. As of January 2023, the non-economic damage cap is $350k or $500k if the case involves a wrongful death claim. These amounts are set to increase annually.
What is a Settlement Agreement?
When the parties establish a settlement that everyone can accept, a contract is written that lays out the terms and details. This includes the amount of monetary compensation, actions that each party agrees to take or not take, and confirmation that once the agreement is signed, the matter is resolved. In paying the settlement, the defendant is released from any further responsibility for the injury and the plaintiff cannot take any additional legal action against them for it later on.
How Are Personal Injury Settlements Paid?
Generally, there are two methods for paying and receiving a settlement. There are different benefits for each one and the best option depends on your particular situation. These methods are known as a ‘lump sum’ payment or ‘structured settlement’ payments. Situations involving victims who are minors also have their own rules and regulations.
What is a Lump Sum Payment?
A lump sum payment is when the entire amount of the settlement is paid in full all at once. This is beneficial for people with immediate expenses. However, it is important to know that the money is not received the moment the agreement is signed. There is still a waiting period that can take over a month or more for the money to be collected and dispersed.
What is a Structured Settlement?
A structured settlement is when the money is divided into installments that are paid out gradually on a set schedule. This schedule can be every month, every three months, or every year. This can help ensure that the money is managed more practically and can be good for people who are going to have long term expenses due to the injury.
How Do Personal Injury Settlements Work?
After being injured in an accident, a person may choose to seek compensation from the responsible party. They have the right to file and pursue a personal injury claim on their own, but it is often wise to obtain a personal injury lawyer. Letters, forms, and documents will then be submitted to the defendant, insurance companies, and any other necessary parties such the DMV. The plaintiff will undergo medical treatment for their injuries and any property damage will be handled. After which the attorney will gather the medical records, bills, and any other relevant documents to calculate the best amount of compensation. They will send a demand letter for that compensation which will generally begin the negotiation process.
How a Personal Injury Lawyer Can Help with a Personal Injury Settlement Outcome
There are many benefits to having a personal injury lawyer. They can take on much of the work involved and help guide you through the rest. They have knowledge and experience that will help evaluate your situation and provide an understanding of your legal rights and options. They can help you find medical treatment, compile and evaluate evidence, and give you moral support. They will fight for you against the corporations and insurance companies and negotiate for the best possible settlement. They know the strengths and weaknesses of the case and can determine if accepting a settlement or filing a lawsuit is the best option. Studies have shown that plaintiffs who have an attorney have a substantially higher chance of a favorable outcome and that the favorable outcomes are noticeably better than plaintiffs who represent themselves. In those studies, 91% of claimants with a personal injury lawyer received a payout as opposed to only 51% of claimants who got paid out that did not have a lawyer. The impacts on payout were also significant as having a lawyer was shown to result in an average payout of $77.6K vs only a $17.6K payout when a personal injury lawyer was not involved [9].
How Much Will I Receive from My Personal Injury Settlement?
There are attorneys who will give specific numbers and big promises that sound enticing. But the reality is that there is no way to definitively know the exact outcome of any personal injury claim. It is also important to remember that the amount of the settlement is a gross payment before deductions. Attorneys who work on contingency and doctors who work on a lien basis are a huge benefit to personal injury victims because they do not pay those expenses out of pocket. But it is important to remember that those expenses are paid out of the settlement at the end. The contingency fee, medical bills, and other expenses involved in building the case are all paid before you receive the final net pay. There are also some occasions where portions of your settlement may be taxable.
How Long Do Personal Injury Payments Take to Receive?
The length of time between an injury and receiving compensation is also subject to a myriad of variables, including but not limited to:
- Amount of treatment needed
- Amount of evidence to be collected
- Complexity of the case
- Level of defendant cooperation
- Amount of expenses to be paid
A case can take anywhere from a few months to a year or more. Once a settlement has been reached, it takes more time to collect and distribute the money.
How to Ensure Payment After a Personal Injury Settlement is Won?
This is another way in which it is helpful to have a lawyer. Sometimes, even after the parties reach a settlement, the defendant may be resistant to actually pay. Your attorney may need to continue to fight and even take separate legal action to hold them to the agreement. Your lawyer can also help you determine the best payout method and help schedule any structured settlements.
Are Personal Injury Settlements Taxed?
Generally speaking, settlements or monetary awards from personal injury claims are not considered taxable income. There may be extenuating circumstances such as interest accumulated from investments that could be taxable, however. If you are unsure of the tax implications involved in your settlement or your plans for it, do not hesitate to ask for more information or resources.
How to Determine the Average Value of a Personal Injury Settlement?
The factors and variables involved in calculating the best compensation for your injury include but are not limited to:
- The severity of the injuries
- The types of treatment needed
- The length of treatment needed
- The permanence of the injuries
- The severity of emotional distress
- The personal impact on your daily life
- The financial impact on your daily life
- The amount of lost wages
- The amount of lost earning capacity
- The amount of property damage
- The percentage of your own liability
- The defendant’s insurance policy limits
- Your own insurance policy limits
- The personal wealth of the defendant
Even if you can estimate a rough idea of these factors, there are still elements that may be unknown or complications that occur later on. An attorney can often give you reasonable goals or a general likely range, but it is impossible to make any definitive promises.
Contact Mesriani Law Group If You Are Dealing with an Injury Sustained in an Accident
While you are not legally required to have an attorney in order to file a personal injury claim, more often than not, it is likely wise to do so. The legal process is best navigated by those who work and live inside it. The stress and complexities involved can be daunting and overwhelming at the best of times, let alone when recovering from an injury. Our firm is dedicated and hardworking, and our attorneys have years of experience fighting for the best interests of our clients. Our office is located in Santa Monica and we represent clients throughout Los Angeles and Southern California. If you have been injured in an accident caused by someone else’s negligence, call Mesriani Law Group today for a free consultation.
Sources
[1] [3] [9] https://www.nolo.com/legal-encyclopedia/how-much-can-i-get-for-my-personal-injury-case-and-how-long-will-it-take-new.html [2] https://bjs.ojp.gov/content/pub/pdf/cbjtsc05.pdf [4] https://www.forbes.com/advisor/legal/auto-accident/typical-car-settlement-amounts/ [5] https://www.iii.org/press-release/triple-i-dog-related-injury-claim-payouts-exceeded-1-billion-in-2022-040623 [6] https://www.alllaw.com/articles/nolo/auto-accident/settlement-factors-motorcycle-case.html [7] https://injuryfacts.nsc.org/work/costs/workers-compensation-costs/ [8] https://calbizjournal.com/what-is-the-average-slip-and-fall-settlement-in-california/
Personal Injury Settlement FAQs
How much should I ask for a settlement?
The point of compensation in a personal injury claim is to compensate you for your damages. The settlement should cover any financial expenses or losses as well as the value of intangible damages such as emotional distress and diminished quality of life. Sometimes, the negotiation process may include asking for more than could be expected to account for the other side making a lower offer.
How do you calculate pain and suffering?
There is no definitive industry-wide formula or standard for calculating the financial value of non-economic damages. However, there are common methods that many attorneys use. One such formula is known as the multiplier method where you add up the economic damages and then multiply the total, generally by a number between one and five. Another formula is known as the per diem method where you find the daily value of the non-economic damages and multiply that by each day you were afflicted.
What injuries pay the most?
The more severe, long lasting, or impactful an injury is, the greater the damages are, and the more likely the injured party is to receive a higher settlement amount. Some of the higher personal injury settlements often come from cases involving:
• Brain damage
• Disability
• Disfigurement
• Loss of limb
• Fatalities
Injuries that end lucrative careers or require lifelong treatment may also receive higher compensation to account for future loss.
