After a car accident, you may decide to file a car accident claim or lawsuit against the other driver to get compensation for your damages and injuries. Many people suffer injuries that leave them with thousands of dollars of medical bills and lost work time. But after you have gotten your settlement, you might wonder if you received an average or fair amount of compensation. How do you know? 

The first thing to realize is the value of the claim is dependent on many factors. The average car accident settlement is based on things such as how severe your injuries are, how long you need medical treatments and rehabilitation, whether surgeries are involved, physical damage to your vehicle, medical bills, lost earnings, and other factors. 

How Car Accident Claims Are Valued

There is no one-size-fits-all way that insurance companies value car accident claims and injuries. But a common tool insurance adjusters use is to multiply your special damages by a certain number. Generally, special damages are your financial losses from the accident, such as hospital bills, doctor bills, lost wages, and costs to repair your car.

Many insurance companies will add up your special damages and then multiply it by a number from 1 to 5 based on how severe your pain and suffering is. 

For example, assume the total of your medical costs and lost earnings from your accident is $10,000. If the insurance company multiplies your special damages by 2 then your claim, according to the adjuster, is worth $20,000. If you had worse injuries and pain and suffering and the adjuster used a 4, your claim would be worth $40,000.

How The Multiplier Is Determined

On average, insurance companies will multiply your special damages by 2 or 3 to determine what your settlement will be. How the insurance company determines what your multiplier will be is largely what determines if you got a fair or average car accident settlement. 

For many car accidents, injuries are minor to moderate and take anywhere from a few days to a few weeks to recover from. Those types of accidents are ones where a 2 or 3 multiplier may be appropriate. It is in more serious car accidents with longer-term injuries that take months or years to recover from where a 4 or 5 multiplier might be warranted. 

But there is no simple answer for which multiplier the insurance company will use in a specific case. It depends on many things. Generally, lower medical bills and lost wages indicates that a 1-3 multiplier should be used. If you have medical costs of only a few hundred dollars, this suggests that your injuries were resolved in one or two medical visits. If you only had one medical treatment, the insurance company might conclude that your pain and suffering was relatively minor. 

However, if your medical expenses were $50,000, the insurance company knows you were probably in the hospital and/or had many medical treatments. It takes weeks to incur $50,000 of medical bills, so the insurance company knows you probably endured more pain and suffering. In this case, a 4 or 5 multiplier might be applied.