Average Settlement Amounts for Car Accidents

Do you want to know what is the average settlement amount for your car accident?

If you were injured then you might be wondering how much is your pain and suffering worth. how much you might be compensated for it. No matter what some people say, there is no formula or method to determine precisely what your settlement will be.

In this article we’ll explain some of the main things that affect the value of your claim. This will give you some insight on just how to evaluate your injury claim. We’ll discuss…

How Insurance Companies Categorize Your Damages
9 Factors That Affect the Settlement Value of Your Claim
4 Car Accident Settlement Examples

Let’s get started…

How Insurance Companies Categorize Your Damages

Your damages can typically be broken down into 2 categories: economic and noneconomic damages. There is a third category but it rarely comes into play [1].

  1. Economic damages — Refer to all the damage you suffered that are easily quantifiable in dollar terms. These are all past and future medical expenses, past and future lost earnings, property damage or repair costs, the economic value of domestic services, and loss of employment or business opportunity.
  1. Noneconomic damages — Refer to subjective damages that are not easily quantifiable into dollar terms. These are pain and suffering, depression, stress, anxiety, loss of ability to function, loss of consortium, and reduced quality of life.
  1. Punitive Damages — Punitive damages do not compensate a victim for any damages they have suffered. Rather they enact a form of monetary punishment on the at fault party. Punitive damage awards are rare, and the law varies state to state, but generally, someone must act in a grossly negligent or in a willfully dangerous way to warrant punitive damages.


9 Factors That Affect the Settlement Value of Your Claim

The value of your claim depends on several factors. Each injury case will be different with it’s own unique circumstances. However to determine the average settlement amount for a car accident, we’ve narrowed down to 9 things that are critical.

These are:

  1. The issue of fault — plays a big role in determining claim value. Whether you live in a fault or no-fault state dictates how the claim will be handled (to a degree) and could even impact your ability to be compensated. Step one is understanding your own state laws, a list can be found here [2].
  1. Extent of property damage — i.e. how much does it cost to fix or replace your damaged car. Insurance companies will sometimes get an independent evaluation of damages if they disagree with your estimate.
  1. Medical expenses — are one of the pillars of claim value. Paramedic service, surgery, hospitalization, doctors visits, medications, physical and medical paraphernalia all add up quickly.
  1. Severity of injury — plays a huge role in determining compensation levels. A minor soft tissue injury will obviously be approached far differently than a traumatic brain injury that leaves someone with a permanent disability.
  1. Duration of medical treatment — this can sometimes be a couple quick visits or stretch on over decades. Insurance companies consider time as a big factor when figuring out how much they owe you.
  1. Available policy limits — sometimes people look at insurance as a bottomless pit of money. Well, this is false. The value of your claim might hinge completely on policy limits.
  1. Your Claim history — if you’ve made many claims over the years this may (right or wrong) reduce your credibility in the eyes of an insurance company. Any perception of fabrication or dishonesty is probably going to negatively affect your claim value.
  1. The type of treatment you received — a lot of insurance companies have nurses or doctors on staff who review claims to ensure that what they are paying for is “medically necessary”. In other words, they look for portions of treatment they can deny on the basis of it being “unnecessary”. This can be a real problem for those who favor alternative medicine to standard western practice.
  1. Strength of legal case — if you (or your lawyer) think you can go to court and easily win in front of a jury this will have a positive influence on your claim and your negotiating position.

Take these bullet points and apply them to your circumstances. The result certainly won’t be perfect, but it should help you feel out the economic parameters of your car accident claim.

4 Car Accident Settlement Examples

Sometimes the best way to figure out what an average settlement amount for a car accidnent is to review some real life examples.

Example 1 – Rear-end accident in New York

Tom and his wife were in a line of cars stopped at a red light. Another driver was on her phone and she slammed into Tom while going about 20-25 mph. Tom’s vehicle was damaged in the back, and both he and his wife suffered whiplashed symptoms. Their settlement was $15,000.

Example 2 – Passenger in an accident in Florida

Lori was injured in a car accident. She appeared to have a cervical sprain with muscle spasms and headaches, as well as a lumbar sprain. After a few months, she settled her injury claim for $11,000. She is still experiencing headaches frequently and requiring ongoing medical treatment. Unfortunately, because she signed a release, Jamie may not be able to claim any further damages.

Example 3 – T-boned in Texas

John was driving late at night when his truck was struck by a vehicle whose driver had fallen asleep at the wheel. John’s truck was totaled and he sustained a low back injury that required surgery. He was forced to take quite a bit of time off of work.

His settlement was $175,000 including the policy limits from the other party and Underinsured Motorist coverage from his carrier.

Example 4 : Head on collision in California

A driver drifted over the centerline and struck Steve (a 27 year-old-male). As a result, he sustained a fractured skull, concussion, broken wrist and various soft tissue injuries. Driver A was unable to work for months on end and his vehicle was totaled. He suffers from PTSD and ongoing problems from his injuries. The claim was disputed and at trial, he was awarded $675,000.

These examples should provide useful context. If your injury is clearly diagnosed as a knee injury, brain injury, rotator cuff injury, or herniated disc estimating claim value is a bit easier.


Figuring out the average settlement amount for a car accident claim can be a challenging process because each case is different and unique. However, there are some general principles that apply to most accident claims. Remember to keep the following in mind:

  • Car accident damages are either categorized as economic, noneconomic or punitive.
  • The value of your claim is affected by many factors, primary among them are extent of injuries & property damage, fault, medical & claim history, policy limits, and the strength of your legal case.
  • Car accident claim settlements can be $500 or $1.5 million. You don’t have to accept an insurance company’s offer and often times consulting with an attorney is in your best interest.


1- American College of Surgeons
2- Insurance Information Institute

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