What Is The Average Car Accident Settlement?

Did you know that only 1 in 20 personal injury cases get resolved in court? The rest end in pre-trial settlements.

Car accidents, in turn, are among the most common types of personal injury cases.

If you’ve been in a crash yourself that another driver caused, you may not have to wait long for an insurer to call you. When they do, they may try to get you to accept a car accident settlement offer.

So what exactly is that settlement offer? How much is the average?

This guide addresses those questions and discusses other settlement facts, so read on.

What Is a Car Accident Settlement?

A settlement is a monetary agreement between a plaintiff, defendant, or insurer.

In a car accident case, a plaintiff is a party claiming to have been the victim of harm caused by the defendant. The defendant, in turn, is the driver who allegedly caused or was at fault for the road incident.

According to, victims can file an insurance claim or lawsuit. In the case of an insurance claim, it’s usually against the defendant’s insurer. The at-fault party’s insurance company may then offer the plaintiff a settlement amount.

The settlement amount should be enough to compensate the victim for their losses. If not, plaintiffs may demand a higher amount. Alternatively, they may choose to pursue the matter in court.

The Average Car Accident Settlement Amount

Liability insurance pays for the injuries and property damage a defendant causes another. According to the III, the average property damage auto liability claim was $5,314 in 2021. That significantly increased to $22,734 for bodily injury auto liability claims.

However, knowing the average settlement amount may not be that helpful to victims. That’s because actual settlements vary widely from one incident to another. For instance, insurers and courts calculate them based on the unique factors of each case.

For example, in 2020, the estimated economic cost of a car crash resulting in apparent injuries was $40,000. That skyrocketed to $155,000 for an incident that caused a disabling injury.

So, victims with more severe injuries deserve a settlement higher than the average.

Factors That Influence Settlement Amounts

Injury and property damage severity are the primary factors that affect settlement amounts. The more severe they are, the more costly they are to treat or repair. Therefore, they warrant higher compensation amounts.

Lost wages resulting from the incident can also drive a settlement amount higher. The same goes for the victim’s non-tangible losses, such as pain and suffering. Accidents that cause plaintiffs emotional distress may also have higher settlements.

Furthermore, the state’s negligence laws impact how much a plaintiff can recover.

For example, some states have contributory negligence laws. Such rules bar anyone who contributed to the incident from receiving compensation. So even if victims were only 1% at fault, they would be unable to recover anything.

In other states, settlements can decrease based on the plaintiff’s percentage of fault. This is what the legal industry calls “comparative negligence.” It comes in two types: modified and pure comparative negligence.

States with modified comparative negligence laws follow a fault threshold. Some set it at 50%, while it’s 51% for others.

With a 50% threshold, a plaintiff must prove the other party was at least 50% responsible. Therefore, a plaintiff’s fault must also be 50% or less if they wish to collect from the other party.

With a 51% threshold, anyone can pursue the other party for compensation if they’re only 50% at fault. However, if a plaintiff’s fault is 51% or higher, they can no longer recover damages.

Pure comparative fault states let anyone collect from another who had a fault, even if it’s only 1%. So if another driver was only 1% negligent, the other could still pursue them for compensation. However, the 1% at-fault driver would only pay 1% of the other party’s losses.

Should You Accept a Settlement Offer?

Car insurance companies often do their best to offer quick settlement amounts. However, their primary goal here is to save themselves work and money. By making a settlement offer immediately, they can entice plaintiffs to accept it.

Unfortunately, such offers may not be enough to compensate victims fairly. This is especially true for cases involving injuries that may cause chronic effects.

One example is a moderate to severe traumatic brain injury (TBI). Health experts say these can result in lifelong physical and cognitive changes. They can even lead to chronic emotional and behavioral impairments.

When plaintiffs accept offers, they give up their rights to make future claims. They also release the insurance company from further liabilities. Thus, they can no longer sue the insurer and their policyholder.

For those reasons, it would be best for plaintiffs not to accept the first settlement offer. Instead, they should wait until they can assess and compute all their bills and losses. These should include medical expenses, property repairs and replacements, and other damages.

It would also be best for plaintiffs to speak with a car accident lawyer first. These legal professionals can help them correctly value their case’s worth. This valuation includes all possible damages the victim may be eligible to receive.

With professional legal help, plaintiffs can avoid agreeing to a lowball offer. Likewise, a car accident attorney can assist victims in negotiating a fair amount. The lawyer can then take the case to court if the insurer doesn’t back down and insist on a too-low amount.

Don’t Settle for a Lowball Offer

Remember: Not all insurers make a fair car accident settlement offer. On the contrary, some even intentionally make lowball offers.

Please don’t accept such an unfair amount, regardless of your dire need for money. Because if you do, you’ll no longer be able to collect more from them. Therefore, it’s best to consult a car accident attorney to help you negotiate what you deserve.

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