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How to Calculate Car Accident Compensation

by  on  Car Accidents & Motor Vehicle Collisions

When someone’s negligent behavior causes you to suffer injuries in a car accident, no amount of money will heal your wounds or erase the trauma. However, compensation can help you make up for added expenses and help you move forward after an accident. It also provides a sense of justice by requiring the person responsible for the collision to shoulder some of the burdens.

But how do you know how much compensation you should receive after an auto accident? How can you tell if an insurance company is offering a fair settlement? Attorneys face this issue every day, so you can learn from their experience.

Understanding the Types of Damages at Issue in an Accident Case

Lawyers generally refer to sums of money awarded as compensation for various factors in a case as “damages.” Below are common types of damages a court may award (although the third type is quite rare).

Economic Damages After a Car Accident

Losses that can be directly calculated as a monetary amount are often referred to as economic damages. These correspond to bills you receive or expected amounts that you lose, such as when you are unable to work due to injuries and don’t get paid. Examples of economic damages include:

  • Doctor and hospital bills
  • Lost wages
  • Expenses for repair or replacement of your car
  • Costs for help at home or additional medical needs
  • Transportation costs to receive treatment or therapy

These economic damages usually also include calculations of losses expected and amounts needed in the future. For instance, the salary lost when you need to take additional time off work and anticipated additional medical expenses in the future would be included as economic losses. Attorneys often call on financial experts and medical professionals to calculate these future costs.

Non-Economic Damages After a Crash

Non-economic damages provide compensation for factors that do not have a direct monetary equivalent but still have an impact on the quality of your life. These factors include physical and emotional pain, distress, mental anguish, loss of enjoyment of life and similar losses.

How do you put a value on these intangible losses? Some insurance companies use a formula based on the value of economic losses. Legal precedent (meaning what courts have awarded in similar situations) can also provide a guideline. Often, however, it depends on the severity of the losses and how well an attorney conveys the impact of these losses that determines the amount an accident victim (or their family in cases involving wrongful death) eventually receives.

Punitive Damages

As noted above, punitive damages are rare because they are awarded to punish and deter bad behavior rather than compensate victims for their losses (but they do provide additional compensation). Punitive damages might be awarded in a car accident case if the driver responsible behaved with extreme disregard for the safety of others such as deliberately causing an accident or driving while extremely intoxicated

What Information Do You Need to Estimate the Value of Your Claim?

Every accident case is unique, so the first rule of thumb is that you should be completely thorough when discussing the impact of your injuries with your attorney. Issues that seem minor to you could be of major importance when establishing compensation amounts.

Costs to Repair or Replace Your Vehicle

To calculate the value of property damage in your case, you will need to consider a variety of factors. If the vehicle can be repaired, the estimate from a reputable repair shop provides an idea of the cost, although it is quite likely that additional damage will be discovered once they start working on the vehicle.

If you need to replace your car, then you would calculate the value of your car as it was before the accident, taking into account the age and overall condition of the vehicle. It is important to not only look at value guides but also at prices offered by used car retailers, particularly in a hot market.

Medical Expenses

It is vital to keep all medical receipts and records. Record ancillary expenses too, such as costs for over-the-counter medicines or bandages, as well as travel expenses to and from appointments.

Calculating future medical needs on your own can be a challenge, but you can ask your doctor about anticipated future care needs and estimate expenses accordingly.

Lost Wages

When estimating your lost earnings, remember to keep account of vacation time, sick pay, or personal leave time you may have used. Estimate how much time in the future you will have to miss work.

If your injuries resulted in a long-term disability that will impact your future ability to work, you also need to calculate your lost earning potential. Evidence to support these losses will include pay stubs, tax documents, and possibly opinions from vocational experts.

Non-Economic Losses

Insurance companies often base compensation offers for non-economic losses on factors such as medical expenses or their opinion of the number of days an accident had a negative impact on your life. In some situations, this type of formula may provide adequate compensation, but in other cases, it provides an amount that is far too low for the circumstances.

It is important for an attorney to have complete information about how injuries have affected your life, including your ability to sleep and focus. An expert witness may be able to explain the substantial impact of non-economic losses on your life and why you should receive more compensation for those losses.

Beware of Quick Settlement Offers

Insurance companies often pressure car accident victims to accept a quick settlement. They may offer the full value of all medical expenses and lost wages, knowing that the amount may look reasonable to anyone who does not understand the full value of intangible losses such as pain and suffering.

Be very careful before accepting anything because that will close your claim and prevent you from receiving additional amounts. Make sure you understand what your claim is worth before you agree to a settlement.

Don’t Be Afraid to Seek Legal Guidance About the Value of a Claim

Attorneys who work with the victims of auto accidents understand the importance of getting full compensation for your losses after a car crash. It is never too soon to consult a lawyer, although it can take some time for him or her to gather enough information to calculate the full estimated value of your claim.

At Levine Law, we work hard to get the maximum available recovery for car accident victims all day, every day. To discuss what may be possible in your case, give us a call at 303-333-8000 or contact us online to schedule a free consultation.