How are Auto Accident Settlements Calculated?


Many people ask how an auto accident settlement is calculated. There are many factors that go into determining the value of your auto accident injury claim; this article discusses the most common factors.

Medical Expenses

In most accidents, the medical expenses are the driving force of your claim. Included in this category are past medical expenses and estimated future medical expenses.

Whether or not it is reasonable to do so, juries and insurance companies use medical expenses as the basis for coming up with other types of less tangible damages, like pain and suffering. Because it is difficult to measure how much pain and suffering someone has endured, they will often take the total medical expenses and multiply that total by whatever percentage they think is appropriate under the circumstances in order to determine pain and suffering damages (for example, pain and suffering is equal to medical expenses times 0.5, 0.75, or 1.25, depending on the facts of the accident and the injuries sustained). The thinking is, if your medical expenses are high, then you must have suffered quite a bit of pain, but if they’re low, your injuries must not have been as painful. Obviously, this is not always true, but that type of reasoning happens so often that it is important to be aware of it.

Income Losses

Your past and future income losses can form an important part of your claim. Self-employed injury victims are entitled to damages for income losses as well; the trouble with self-employed individuals is that most will need to put forth more effort than employees proving up their claim because their income is not always as clean-cut as that of ordinary employees.

Employees who had to use sick leave, vacation time, and other forms of paid time off to deal with their injuries are still entitled to compensation for that lost time. For that reason, it is important to keep track of time taken off to recover from injuries or to attend healthcare treatment appointments.

Pain and Suffering

Pain and suffering damages are designed to compensate injury victims for the pain of their accident injuries, and the suffering they’ve endured living with such. As noted above, they can be highly debatable and are therefore often tied to medical expenses, which are much more straightforward. Even though they are difficult to calculate, pain and suffering damages are very important, and they are a vital component of your auto injury claim.


Disfigurement refers to cosmetic changes to your body because of the accident. For example, a broken nose could alter your facial appearance even if it doesn’t affect your activities or cause pain. Scarring is another common source of disfigurement.

The less visible the change, or the more easily covered, the less money a jury is likely to award for such. For example, a four-inch scar on the side of your upper leg is going to be “worth” less in a settlement calculation than a four-inch scar on your face.

Permanent Injuries, Impairment, Disability

Some injuries are permanent. Some will forever impair your daily activities or rise to the level of a disability. These types of injuries can be devastating. For that reason, they form a significant part of the accident claim.

Oftentimes, soon after the accident, you won’t know whether or not your injury is permanent. For this reason, we always recommend you follow your treatment providers’ treatment recommendations as much as possible. If not, it could be argued that your ongoing pain and issues are actually the result of your failure to obtain appropriate care rather than a permanent injury.

Damage to Your Vehicle

Juries and insurance companies will often look at the damage to your vehicle to determine what your injury is worth. This is true despite the fact that there is solid science showing that low damage accidents can cause serious and lasting injuries. In addition, different vehicle types react differently in a crash: some are designed to collapse, like a crushed aluminum can, to absorb the energy of impact, while others are designed with a more collision-resistant frame, which causes the occupants’ bodies to feel more energy from the impact.

Regardless, insurance companies know that most people believe the fallacy that whenever there is minimal damage to vehicle, it must mean the people inside weren’t hurt or only sustained minor injuries. For this reason, regardless of what you believe to be true, the amount of damage to your vehicle almost always affects the settlement value of your auto claim.

Soft Tissue Damages

Soft tissue damages are damages to muscles, ligaments, and tendons; contrast them with injuries such as broken bones and cuts and bruises. Whiplash is a common cause of soft tissue injuries. Because they are not visible, and often do not show on x-rays, soft tissue damages are valued, for settlement purposes, lower than other types of injuries. They are also less dramatic and more difficult to understand and empathize with, so they end up being valued lower by juries and, by extension, insurance companies.

Other Factors

There are many other intangible factors that affect the settlement value of your claim. The insurance companies are managing risks. Is there a risk that a jury will find your more likeable than the average person? If so, your claim will be valued higher than that of someone who is less likeable, even assuming exactly the same injuries. Are there other factors, like harm to children? If so, your claim is likely to be valued higher than one without such facts, because it is less dramatic, less likely to elicit empathy from the jurors. How likely is the jury to be angry with the driver who hit you? That will definitely factor into the calculus. Every case has a unique set of intangible factors that affect its settlement value.


Evaluating auto accident settlements requires the analysis of many factors, some of which may not seem logical or relevant. For this reason, we recommend that you consult with an experienced auto accident lawyer regarding the value of your case. The lawyers at Springs Law Group offer free initial consultations. We can sit down with you and discuss the factors unique to your claim and injuries to determine what an appropriate settlement might be in your case.