How Are Car Accident Settlements Calculated in California?

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Car accident victims rightfully want to know how much they will receive in compensation. In addition, they want to know the basis for the amount.

Knowing how a settlement is calculated is helpful for several reasons. It allows you to evaluate any settlement offers you receive. It helps you plan for the future and form realistic expectations.

How do you calculate a car accident settlement in California? Our car accident lawyers explain.

Is there a calculator for car accident settlements in California?

Let’s start with clarifying one thing – there is no official car accident settlement calculator in California.

There are laws that state what a person is entitled to under the law. However, there is no calculator to neatly total up exactly how much someone will receive in compensation.

As you total up your damages, it’s important to remember that the entire case must be evaluated. You may calculate the sum of your damages allowable by law, evaluating your non-economic damages in the process. However, the total compensation that you are likely to receive may not be this calculated amount. There are additional factors and considerations that may impact the amount you receive.

What if the insurance company talks about a settlement calculator?

If an insurance company references a calculator, it is just an estimator or software that they are using to arrive at a suggested amount to offer in settlement. It is not an official calculator.

With that said, a car accident victim can still total their damages. They can understand what losses are factored in and how to value them. Calculating the amount of damages can give the person a starting point to evaluate the case and pursue settlement negotiations.

Formula for Calculating a Car Accident Settlement in California

To calculate a car accident settlement in California, use the following formula:

economic damages x non-economic multiplier – other factors = your car accident settlement 

A car accident settlement begins with economic damages which are multiplied by a number that represents the relative severity of the accident. Then, the total is raised or lowered to account for other factors that may play a role in the ultimate value of the case to arrive at an approximate car accident settlement amount.

How to Calculate a Car Accident Settlement in California

To calculate a car accident settlement in California, follow these steps:

1. Determine the total of your economic damages

Economic losses are direct financial losses that you have because of your injuries. Medical bills typically comprise a large portion of economic damages. Future medical bills, property damage and any other tangible, financial losses can be included. These amounts can be totaled and included in your settlement amount.

Sometimes, lost wages are included in economic damages before the multiplier is applied. It’s also common to separate lost wages out and add them separately after the multiplier is applied. Separating out lost wages may justify use of a higher multiplier, so you may arrive at a similar answer using either calculation method.

2. Identify the amount of non-economic damages. Reduce it to a multiplier.

Once your tangible losses are accounted for, you need to figure out compensation for your non-economic damages. Of course, you cannot add up the amount of your suffering like adding up a receipt. Instead, you apply a multiplier to the amount of non-economic damages.

For minor injuries where the period of recovery is measured by weeks or months, the multiplier may be as low as 1.5. When a victim suffers life-changing injuries and severe, permanent debilitation, a multiplier may be as high as 5.

There may be situations where your economic losses do not fairly reflect your non-economic losses. For example, you may have scars or physical disfigurement. These injuries may not benefit from expensive medical care. However, they may impact your life drastically. It’s important to consider the relative impact on your life as you determine what multiplier to apply for your economic damages.

3. Multiply your economic damages by your non-economic multiplier

Once you know your multiplier, apply it to your economic damages. For example,

Economic damages = $100,000

Multiplier = 2.5

$100,000 x 2.5 = $250,000

Don’t add the economic damages amount; instead, take the total economic damages amount and multiply it by the multiplier figure to arrive at a subtotal.

4. Add or subtract for any legal factors that may impact the amount of the claim

Simply totaling up damages with a calculated formula often doesn’t give you an accurate amount for your settlement. Most settlements are not this amount. There are many other factors that can impact what you receive in compensation, including:

  • Comparative negligence and how shared fault may impact the claim
  • What insurance policies exist to satisfy a judgment
  • Who is responsible including any employers or multiple responsible parties
  • Any doubt about the legal fault of the defendant
  • Questions about causation of injuries including pre-existing conditions
  • Applicability of any laws that may limit damages
  • An award of punitive damages

If you have a very clear legal case, and if there is insurance or the party at fault has the resources to satisfy a judgment in full, you may receive most or all the calculated amount of your settlement. However, there may be factors that raise or lower the amount you receive in compensation. If legal issues call the strength of the case into question, it may lower the likely amount of compensation. If punitive damages are a possibility, they may raise the amount of the settlement.

Consultation for Calculating a Car Accident Settlement in California

Ultimately, each car accident settlement is an individualized, personalized determination. There is no calculator that can definitively determine the settlement amount completely and accurately in all cases. To understand the value of your case, ask our experienced team for a consultation about your situation.

Per diem calculation method

No discussion of how car accident settlements are calculated would be complete without a discussion of the per diem method. Rather than using a multiplier method, a daily value is calculated for the person’s non-economic damages. This amount is awarded for each day that the person is impacted by their injuries. This is another approach to determining a settlement amount for a car accident, but it may not be practical to use for long-term or debilitating injuries.

Trying to calculate a car accident settlement? Contact us now.

Don’t wonder what your car accident settlement should be. Get a personalized consultation from our experienced team at Sargent Law Firm. Contact us today to talk about your case.

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