Most California auto accident cases are settled out of court. Usually, you, the injured party, negotiate with the insurance company for a favorable settlement instead of filing a lawsuit in court, which is time-consuming and expensive. If you want reasonable reimbursement for your damages, it is crucial to understand your claim’s value.
Auto accident attorneys and insurance adjusters use the multiplier formula to determine the value of a claim. The method is an effective tool for helping you obtain compensation that will cover all your damages. Therefore, knowing how it works allows you to analyze your claim’s worth and negotiate an appropriate reimbursement with an insurance adjuster.
Vehicle Accident Settlement
To better understand how a car accident settlement formula works, it is critical to understand the various damages or financial compensations involved in car crashes. Payments in auto crashes are classified as “special,” or economic damages, and “general,” also known as non-economic damages. Car collisions often involve negligence, so, as a victim, the court rarely awards punitive damages, explaining why these damages are excluded from the settlement calculator.
Economic or Special Damages
All out-of-pocket financial losses you incur due to the accident are special damages. These are easy to calculate or attach a dollar value to and include:
- Hospital or medical bills.
- Estimated future medical expenses if your injuries require ongoing treatment.
- Lost income or wages.
- Loss of earning capability because of disability stemming from the collision.
- The property damage to your automobile.
- All out-of-pocket expenses like ambulance fees.
Special damages are easy to estimate because you can attach a dollar value based on the costs you have incurred and the wages you have lost. An excellent example of economic damage is medical expenses. You receive a medical receipt or bill from the health facility you visit for examination or treatment after the accident for these expenses.
Conjectural special damages, like future medical bills, are easy to calculate because you can attach dollar amounts to them. Your doctor can tell you the procedure you will need in the future and the cost of the treatment in dollars. Examples of future medical expenses include future health care, physical therapy, rehabilitation, surgery, and transport costs to the hospital. Therefore, when doing the calculations, it becomes easy to determine the amount you need as compensation for medical treatment, both current and future.
Calculating lost wages or reduced earning capability is easy because you and the insurer only need to refer to your employer’s records to determine the amount you were earning. You will then multiply the amount you used to make by the number of months you missed work. When it comes to lost future earnings or reduced earning capacity, you must bring in an expert witness to testify on the income someone in your situation could have been making were it not for the injuries.
It would help if you understood that even though these damages are easy to calculate, you need to furnish the adjuster with evidence that they exist. Failure to document the damages incurred will leave you with a weak or no claim. The insurance company will not compensate you for out-of-pocket expenses you cannot prove. Therefore, you are encouraged to document the receipts or invoices for the costs stemming from the car accident.
When you fail to understand economic damages and what you need to document, you should contact a knowledgeable car accident injury attorney to help you understand the losses that fall under this category and the documents you need to preserve for maximum compensation. A profound lawyer will review your case and craft strategies to ensure the monetary compensation you obtain is adequate to cover all your special damages.
General or Non-economic Damages
General damages refer to non-financial losses stemming from the car accident. They include:
- Psychological suffering.
- Physical pain.
- Mental anguish.
- Reduced quality of life.
- Loss of consortium.
- Scarring.
- Disfigurement.
- Permanent physical disability.
These damages compensate you for the losses you cannot easily state in a dollar figure or quantify. If you were asked the dollar amount you would want as compensation for your physical pain and mental anguish, you would give a different figure than what another car accident victim with the same injuries would provide. The insurance adjuster will also give a varying figure if asked what you should receive for your pain and suffering. It is for this reason that these costs are only estimated.
You cannot quantify general damages by multiplying your salary by the work hours lost due to auto accident injuries. Instead, the compensation amount depends on injury severity and other factors like medical costs, lost earnings due to incapacity to work, and other effects of the accident that could arise in the future.
Several states have a general damage cap for auto accident claims. The statutes limit the general damages you can obtain. Therefore, if you reside in any of these states with a damages cap, your amount of general damages will not exceed the provided limit. Still, the limit does not denote a guaranteed amount of compensation. The limitation only acts as a standard for awarding damages. However, California has no cap on general costs in auto accidents.
Proving general damages to an insurance adjuster or attorney is an uphill task. You should tell your story and how the crash has impacted various aspects of your life to receive compensation. It is advisable to write down the pain you experience every day you wake up and the effects of the car accident injuries on your daily life. When the pain and anguish you have endured due to another party’s negligence are on paper, it is easier to prove general damages.
As much as you want to document your feelings after the accident, it is crucial to focus on healing because your health should come first. Hire an experienced injury attorney immediately after the accident to start gathering evidence. A reputable attorney will write down your experiences during recovery and paint a clear picture of the mental suffering, bodily pain, and emotional distress the accident has caused you. Doing so will help you craft a compelling case to obtain reasonable damages.
How Does a Car Accident Settlement Method Work?
The car accident settlement method is an estimation that considers several factors to determine the monetary compensation you should acquire for damages stemming from an auto crash. These factors include medical bills, lost earnings, physical pain, and emotional distress.
Additionally, the formula considers the subjective elements of an auto accident claim, like the severity of the harm suffered and the impact of the injuries on your routines. The person liable for the accident and whether you partly contributed to the crash will also affect the damages.
After considering all these factors, the multiplier method helps determine the total amount of compensation. Typically, the formula determines non-economic damages depending on the accident and injury severity. The auto accident calculator sums up all your special damages and then estimates general damages by multiplying your economic damages with a multiplier ranging from 1 to 5.
The formula looks like this: “economic damages + (economic damages × multiplier).
Insurance companies developed the formula using the results of thousands of auto accident claims, and it helps predict the value of a claim like a court would if the case proceeded to trial.
The settlement calculator then adds a dollar figure to the total amount you should receive as reimbursement for your losses. Even though the multiplier will tabulate the figure you deserve as compensation, there is no guarantee the insurance firm will be willing to part with the amount. These individuals are in business to make a profit, and paying out maximum compensation reduces their profit margins. Therefore, the adjuster will significantly reduce your multiplier, even if it does not represent the crash's impact on your life, to lower the damages you should receive.
Nevertheless, when you partner with an injury attorney, they will help you determine the appropriate multiplier number based on the severity of the injuries. If your injuries are severe, your multiplier will be higher, translating to more compensation. An insurance adjuster will not play tricks when you have an attorney on your side, enhancing the likelihood of maximum reimbursement. Do not agree to a settlement offer from the adjuster without consulting with an experienced attorney to understand the effects of agreeing to the insurance firm’s or third party’s settlement.
The car accident settlement calculator is critical in determining your damages. Therefore, understanding how the formula works makes it easy to estimate the damages the jury would award for the same case if it proceeded to trial, helping you obtain a fair settlement.
The Multiplier Formula
The multiplier is a critical element of the vehicle accident settlement calculator. It enables you to calculate the monetary compensation you should expect from an insurer or third party. In the calculations, your attorney sums up your auto accident medical bills, lost income, and disability from the crash. Based on the collision's severity, these damages are awarded a number ranging from one to five. The more the accident has impacted your life, the greater the multiplier and non-economic damages.
Let us say that you sustained moderate whiplash from a rear-end accident, and your vehicle was severely damaged beyond repair, but apart from that, you are doing well. Replacing the car, medical expenses, and lost wages add up to $40,000. When estimating your total damages, the adjuster will assign you a low multiplier of 2 because the accident's impact on your life was minimal. In these circumstances, your general damages will be $40,000 of the special damages times 2, giving you a total of $80,000 in general damages. From these calculations, your total compensation will be the economic damages of $40,000 plus the general damages of $80,000, giving you a total of $120,000.
However, the total compensation would be higher if you were involved in a T-bone collision and suffered spinal cord injuries that paralyzed you. If the adjuster estimates your special damages at $2 million, they will assign you a higher multiplier of five because of the disability and disfigurement stemming from the crash. Your non-economic damages will be estimated by multiplying the $2 million economic damages by the "multiplier," giving you a total of $10 million. Based on the multiplier method, the compensation you will receive will be $2 million in special damages plus $10 million in general damages, giving you a total of $12 million.
Reasons for Using the Multiplier Formula
Insurance firms use the multiplier to estimate your auto accident claim’s value. It quantifies the damages the court would have awarded if you filed a personal injury lawsuit and the case proceeded to trial. With injury claims, only the jury can quantify the worth of a lawsuit.
Nevertheless, bringing a lawsuit against a negligent driver in court is costly, stressful, and time-consuming. Insurance companies do not like to go to trial because the court normally awards the claimants hefty amounts if the insurer loses the case.
Also, you, the claimant, will be disadvantaged by filing the claim in court because it could drag on for months or a year, which is not your wish considering you have medical bills and a family to take care of. Therefore, you also want to settle the case out of court to avoid the legal costs of a trial and delayed compensation, making an auto accident settlement the best option for all parties. The settlement calculator helps facilitate the payment by estimating what the jury would likely have awarded had the case reached the trial stage.
Apart from insurance companies, your injury attorney can also use the settlement formula to determine the amount the adjuster should offer as reasonable compensation. Therefore, whenever you sustain injuries in an auto accident caused by someone else’s negligence, you should talk to a reputable attorney to approximate the worth of your claim for a fair settlement.
Per Diem Method
The multiplier is not the only car accident settlement formula. Some insurance adjusters adopt the per diem technique. Instead of multiplying the special damages with a multiplier, this formula assigns a monetary value to each of your recovery days. You receive payment close to your daily earnings before the accident for all the days you experience pain and mental anguish because of the injuries from the accident. The formula estimates your general damages, which are added to your economic damages.
For instance, you sustain injuries in a car accident, and your special damages are estimated at $70,000. If the injuries prevent you from working for 100 days and your daily wages are $400, your total general damages under the per diem formula will be $40,000. Your fair settlement for the claim will be $110,000.
Your attorney can use the per diem or multiplier method, whichever offers the maximum compensation for your injuries.
Factors Affecting the Settlement Figure
The compensation you obtain for your auto accident injuries depends on several factors. The first factor is the severity of the injuries sustained. The type of injury determines your stay in the hospital, the cost of treatment, and the duration of your absence from work. The more severe the harm suffered, the higher the damages.
Similarly, your policy limit will impact the amount of settlement. If your claim is worth more than your insurance policy limit, you must pay for the difference out-of-pocket.
Another factor impacting your reimbursement for the injuries is the evidence you provide to support your claim. If you cannot prove the damages suffered, you will have a weak claim, significantly lowering your damages. Therefore, you must start collecting evidence immediately after the crash. Take photos of the scene, your injuries, and the damage to the vehicle, and jot down witness statements. Also, you should request a comprehensive medical report, a police report of the accident, and invoices for all the costs incurred due to the injuries. The insurer will be quick to settle if you have solid evidence.
Furthermore, if you are partly responsible for the car accident, the insurance company will reduce your damage by your percentage of negligence. California adopts the comparative negligence doctrine. If someone caused your accident, but their insurer can prove that you partly contributed, your fraction of fault will reduce your damages. However, you will receive maximum compensation if the liable party is entirely to blame for your injuries.
It is worth noting that under the comparative negligence doctrine, you cannot sue for compensation if you are more than fifty percent liable for the accident. Instead, the other party will likely sue you, although they will not receive total compensation as they also contributed to the accident.
All auto accident claims have unique circumstances and are therefore handled differently. It is crucial to evaluate all these factors before estimating the damages you are entitled to from a third party or insurer. The best person in a position to assist you in understanding all the elements of the claim and how to maximize damages is an experienced injury attorney.
Find a Profound Car Accident Injury Attorney Near Me
Estimating a vehicle accident settlement is sophisticated. For this reason, you should partner with a profound personal injury attorney to understand how the settlement calculator works, assess your damages, and negotiate with an adjuster or third party for your rightful settlement. At the Los Angeles Car Accident Attorney, we are ready to offer competent representation in your claim for maximum reimbursement. Call us today at 424-237-3600 for a no-obligation case review.
