What Is The Average Settlement For A Car Accident?

Updated 3 days ago
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Many factors go into a car accident settlement. These include medical bills, damages to the vehicle, lost wages, and pain and suffering. However, the average settlement for a personal injury claim is about $20,000, with higher amounts available for more severe injuries.

How is a settlement amount determined?

A settlement is an amount of money an insurance company gives you after you've been injured or impacted by a car accident. It's to make up for what you've lost, and several factors come into play.

Injuries sustained/medical bills

Auto insurance generally covers medical bills from a car accident. The exact amount you receive comes down to the severity of your injuries.

Needing a cast temporarily for a broken arm doesn't result in the same settlement as permanent paralysis.

Pain and suffering

Pain and suffering relate to the physical, mental, and emotional anguish the accident caused you. It's more challenging to quantify, but insurance companies use one of two methods to determine payouts.

The multiplier method applies a value between 1.5 and 5 to your medical costs. The per diem method takes how much you make per year, divides it by the number of working days in a year, and provides you with a settlement in accordance with how long you were in pain.

Lost wages

Finally, there are lost wages. You may have to skip work to attend medical exams. In the event your boss doesn't pay you for that time off, then your insurance may cover the cost.

It's generally related to how many days you had to take off and what you would have earned during that time.

Will I get the full amount that was calculated?

You may think you're in for a jackpot. But insurance companies always try to pay out the least. As a result, the initial settlement offer may be quite low.

There are certain excuses insurance companies typically use to justify a lower settlement. And in some cases, they're your own doing.

  • You didn't seek immediate medical attention.
  • You have pre-existing conditions.
  • The insurance company feels like you could've worked during that time.

What factors determine an increase in compensation?

Naturally, greater medical expenses and more time off work result in higher settlements. Specific injuries require more medical attention and expense on your end, and they include:

  • Paralysis
  • Permanent or severe disfigurement or scarring
  • Permanent or severe loss of bodily function

Where does the settlement amount come from?

Following a car accident, the insurance agencies involved determine who's primarily at fault. It's possible that only one driver caused the crash, or each driver share some of the blame.

This plays an important role in determining who pays the settlement.

Not at-fault

When you're not at-fault for the accident, your insurance company pays you the settlement. The company then seeks to recover those damages from the negligent driver's insurance agency.


Your insurance company still pays for at least part of the settlement if you're at-fault. The exact amount depends on the kind of coverages you have with your policy.

This is why it's good to have comprehensive coverage that's as high as it goes. You may have insurance that covers medical expenses up to $50,000. But everything beyond that, you're on your own.

Many policies can give you coverage up to $300,000. In a significant crash, you could end up paying out-of-pocket if you have an insufficient plan.

Is my insurance good enough to protect me in an accident?

If you're not sure, consider comparing different insurance providers to your own to find out who's able to provide you with the level of protection you need. Don't get caught on unprepared in the life-altering car accident.

Try our easy insurance comparing tool and receive quotes, instantly!

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