Average Settlement Amounts for Car Accidents

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

If you were injured in a motor vehicle accident, then you might be wondering how much your pain and suffering may be worth as well. Or, how much you might be compensated for it. No matter what some people say, there is no single formula or method to determine precisely what your settlement will be.

However, we can provide you with roundabout averages to offer some more insight into what you may expect regarding your car settlement amounts average. If you were involved in a car accident and sustained relatively minor injuries, then the average settlement you can expect would probably fall in the range of $10,000 and $25,000.

However, if you sustained more substantial injuries because of the motor vehicle accident such as orthopedic injuries and other injuries that may result in surgery, physical therapy, and ongoing care, then the numbers to expect for a settlement offer may reach higher and range between $50,000 and $75,000. But again, this is just an estimate and relies on a number of different factors for each individual case.

When it comes to the amount you may receive for pain and suffering, it is not so easy to provide an average. People tend to think that the average you receive in compensation would be approximately three times more than the total cost of the medical bills you have incurred. However, to determine a more precise amount of compensation for an auto accident settlement or claim, a judge will have to look at the type of injuries, the diagnosis, the treatment and duration of treatment, preexisting conditions, the severity of the accident, and wage losses resulting from the personal injury.

As you can see, there are many factors involved when it comes to finding an accurate amount of an average settlement offer for a car accident case. Keep in mind, that there may not even be a settlement offer to reach until after you have completed all your medical treatment, so the entire sum can be factored into the amount of compensation that will be due for the personal injury settlement.

In this article, we’ll explain some of the main things that affect the overall value of your claim and settlement offer. This will give you some insight on just how to evaluate your personal 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 after a car accident can typically be broken down into two categories: economic damages and noneconomic damages. There is a third category of damages known as punitive damages, but it rarely comes into play during a car accident case. [1].

  1. Economic damages — Refers to all the damages you suffered that are easily quantifiable in dollar terms. These include all past and future medical expenses, past and future lost earnings, property damage or repair costs for your motor vehicle, the economic value of domestic services, and the loss of employment or business opportunity due to the automobile accident.

Economic damages are also often referred to as general damages of the claim and are calculated using economic damage quantification. These measurements are derived from the damages sustained during a harmful act and were often calculated by insurance companies, lawyers, adjusters, and other agencies, but now these services are being given to accountants who have the professional training they need to perform these assessments and calculations.

Forensic accountants will utilize both statistical and econometric tools to provide fair calculations regarding the loss and damage because of an accident and claim.

  1. Noneconomic damages — Refer to subjective damages that are not easily quantifiable in dollar terms. These are pain and suffering, depression, stress, anxiety, loss of ability to function, loss of consortium, and reduced quality of life.

Noneconomic damages are also often referred to as special damages. While economic damages cover any monetary loss due to an accident, noneconomic damages include non-monetary costs that are seen to be less concrete than economic damages, which makes them harder to award a dollar value to when calculating compensation for a claim.

A catastrophic injury, for example, would include some greater losses than can be found in economic damages, and these losses will require a closer evaluation by the judge to determine the fair amount to be given in the settlement.

  1. Punitive Damages — Punitive damages do not compensate a victim for any damages they have suffered. Rather they enact a form of monetary punishment inflicted 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.

Punitive damages exceed the simple compensation amounts and are rather used as a punishment. Also known as exemplary damages, punitive damages are typically only awarded by a judge and are given in addition to actual monetary damages. It is a way in which to hopefully deter the same behavior of the defendant in the future. In other words, to help teach them a lesson and perhaps prevent a similar accident from occurring in the future due to negligence and carelessness.

The Multiplier Method is a standard way of calculating pain and suffering compensation for a claim. You multiply the expenses related to your medical bills and lost income by a multiple between two and four.

For example, if your medical bills totaled approximately $5000, you missed a total of two weeks from work for an amount of around $3000 in lost income, then the expenses are approximately $8000. Two times this estimate would be around $16000 and four times this estimate would be upwards of $32,000. The multiplier will increase as it pertains to the actual extent and cost of the injuries, the time of recovery, and whether or not the damage inflicted was temporary or permanent.

The Per Diem Method is another calculation that takes a per diem, or per day rate, and adds it to your total expenses. For example, your medical bills total around $20,000, and your income loss is around $10,000, you will have a total of $30,000. Using that, you can then assign a per day rate for each day that you suffered because of your injuries.

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 its own unique circumstances. However, to determine the average settlement amount for a car accident, we have narrowed the list down to 9 critical elements:

  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].
  2. The 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.
  3. 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.
  4. The 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 and ongoing treatment needs.
  5. Duration of medical treatment — this can sometimes be a couple of quick visits or can stretch on over decades. Insurance companies consider time a significant factor when calculating how much in compensation you are due.
  6. Available policy limits — sometimes people look at insurance as a bottomless pit of money. Well, this is false. The value of your claim might also hinge completely on policy limits.
  7. 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 based on it being “unnecessary.” This can be a real problem for those who favor alternative medicine to standard western practice.
  8. The strength of legal case — if you (or your lawyer) think you can go to court and easily win in front of a jury, then this will have a positive influence on your claim and your negotiating position.
  9. 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 and the amount you are ultimately awarded in compensation.

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

4 Car Accident Settlement Examples

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

Example 1 – Rear-end accident in New YorkTom and his wife were in a line of cars stopped at a red light. Another driver was on her phone, and due to her distracted driving, she slammed into Tom while going approximately 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 FloridaLori 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 she requires ongoing medical treatment.

Unfortunately, because she signed a release, Jamie may not be able to claim any further damages. Her medical treatment was not complete at the time of the settlement.

Example 3 – T-boned in TexasJohn 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. He sustained a lower back injury that required surgery. He was forced to take quite a bit of time off work due to his injuries, therapy, and lengthy treatment.

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 CaliforniaA 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 with 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, some general principles apply to most accident claims.

Remember to keep the following in mind when trying to calculate your own settlement amount:

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

Want to know How Much Your Injury Claim is Worth? Get a free settlement estimate right now.



1- American College of Surgeons
2- Insurance Information Institute

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