How Much Is Your Car Accident Settlement Worth? Free Settlement Estimate
How To Calculate A Car Accident Settlement Amount

Insurance adjusters evaluate numerous car accident claims on a daily basis, and they become quite experienced at how to calculate car accident settlement amount. This article will examine all the factors that go into calculating car accident settlement amounts, including special damages and lost wages.

How Insurance Companies Calculate Car Accident Settlements

The first part of negotiating your car accident settlement is to determine a ‘reasonable’ amount of compensation you would accept to give up going to court. Most auto insurance companies and personal injury attorneys rely on certain settlement formulas to establish a starting point for a car accident settlement. This is the case for all types of personal injury cases, including car accidents.

The most common car accident settlement formula to get the value of your case is to use a multiplier against your medical expenses to devise a rough estimate for non-economic damages – your pain and suffering. This number will be added to your economic losses, such as property damage, lost income and medical bills to get to an amount of money that serves as a starting point for negotiations.

The following formula is used by insurance companies to calculate automobile accident settlements: special damages x (multiple reflecting general damages) + lost earnings = settlement amount. Depending on the severity of the damage, a multiplier approach is used where a number ranging from 1 to 5 is applied to the total special and general damages to get a final car accident settlement amount.

Special Damages vs. General Damages in a Car Accident Settlement

The first part of the auto accident settlement formula is to determine what are ‘special damages’. Special damages are actual financial losses you have suffered due to your accident, such as property damage or medical expenses. Special damages are essentially out-of-pocket expenses associated with the accident, such as medical bills or property damage. They can include your deductible, towing fees and property damage.

Then there are general damages, also known as non-economic damages, which are meant to compensate you for being injured in an accident, but they are more difficult to calculate in an auto accident settlement. General damages can include pain and suffering, mental distress, permanent injuries and loss of enjoyment of life.

Special damages can sometimes be calculated using fairly objective criteria. This is not the case with general damages, however. An insurance company will often try to use all its expertise and experience to minimize your general damages, so it should have its own expert examine your case.

Insurance companies rely on ‘multiplier method’ to calculate settlement amounts for personal injury settlements. The multiplier method assigns a value that ranges from 1-5 based on the severity of your injury and how severely you have been impacted by the accident. This number i then applied to your special damages and lost wages/future economic damages to determine an approximate settlement amount.

The multiplier method for calculating pain and suffering into car accident settlement amounts is accepted in all but a few states. Some states require the car insurance company to consider other factors in addition to the multiplier when establishing a final personal injury settlement value, such as pain and suffering. Insurance companies often will use it in conjunction with the Federal Bureau of Investigation’s ‘Uniform Crime Report’, which lists average income loss per crime.

How is the multiplier method used to calculate general damages?

The key question in calculating a car accident settlement is to decide what your pain and suffering from your injuries are worth. Pain and suffering in a car accident claim can include physical discomfort, anxiety, stress and various negative effects of the car accident injuries, and the impact the injuries have on your life.

The typical way to value these damages is the use the multiplier. To arrive at a dollar figure that is a starter for negotiations, an insurance adjuster usually ads up the special medical damages (all quantifiable losses) and multiply that by 1.5 to 5 to get to the final settlement payouts.

What the multiplier for pain and suffering damages will be depends on the severity of bodily injury. How serious are they? How many doctor visits have you had? How much treatment will be needed in future months? Will you make a full and healthy recovery. Will there be any permanent effects to your injuries? How did the accident and your injuries affect your life?

Naturally, the multiplier that is used against your injuries is almost always the bone of contention between you, your car accident lawyer and the insurance company. You will want a higher multiplier, and the adjuster will argue for a lower multiplier.

There is some wiggle room in these negotiations, but you should know that a 4 or 5 multiplier is reserved for very serious injuries that require long term rehabilitation for months or years. The most serious 5 multiplier usually is for injuries that are permanent and life altering. Most car accident injury settlement claims involve a 2 or 3 multiplier.

Once you have used the multiplier to get to a figure for general damages, adding that figure to the special damages total will provide the insurance adjuster and you a reasonable idea of the personal injury settlement value. At the very least it is a fair starting point for insurance claim negotiations.

Multipliers are applied based on the severity of your injury. The higher the multiplier used, the higher your personal injury settlement value.

The following car accident damages multiplier list is a rough guide based on common car accident injuries and the average car accident settlement amount for each. This is provided as a guide only, not to be used to gauge the value of any actual car accident injury settlement:

1 – Slight sprain and/or other minor injuries would qualify for this pain and suffering multiple; No visible severe injuries; No time off work (less than one week), minor car repairs will probably get a multiplier of 1.

2 – Moderate sprain or strain; Treatment required but no time off at all; Some visible injuries (no fractures). The average settlement offer for these car accident cases can vary widely depending on the type of medical treatment, what the police report/crash report says, how much insurance coverage the at fault driver has, and even the amount of emotional distress you’re going through after the car accident. PTSD car accident settlement awards are becoming more and more common as mental health is becoming more mainstream and less stigmatized. These moderate injuries and multipliers of 2 are often seen in low speed rear end collision settlements.

3 – Severe sprain or strains such as an average whiplash settlement would usually see a multiplier of 3 especially is if ; Treatment required, time off work cannot be estimated at this point; More visible injuries (1-5 fractures to extremities). Settlements involving bad lower back injuries in car accidents often fall into this category and usually see a settlement offer of mid-high 5 figures, but a settlement amount over 6 figures is not uncommon.

4 – Moderate grade 3 whiplash settlements would fall in this category, since most require physiotherapy to full recovery; Significant time off work (6 weeks); Visible injuries are moderate in number and severity. Serious broken bones and high levels of physical pain would often qualify for a pain and suffering multiple of 4.

5 – Severe injuries and car accident wrongful death settlements can be 5 multipliers, as are most multipliers in semi truck settlements and motorcycle accident injury claims requiring time off work; multiple fractures to the extremities and/or skull; visible injuries are extensive (6+ fractures); burns. Auto accident settlements involving paralysis or another serious injury that could have lifetime implications generally get a 5 multiplier.

For example, if you have a sprain or strain, but no serious injury with no time off work and your medical expenses are $200, you will be compensated according to the 1 multiplier.

In another example, if you have a whiplash claim with a concussion and other moderate injuries requiring physical therapy, significant time off work (4 weeks) and a lot of physical pain then your multiplier will probably be roughly 3.

And if you have a severe whiplash requiring time off work, multiple fractures to the extremities and/or skull, visible injuries are extensive (6+ fractures), burns with other types of special damages your multiplier would be 5. Multipliers of 5 typically result in the largest auto accident settlements, because to have that large a pain and suffering multiple, the chances of having very high medical bills and future lost income are also high.

What factors influence lost wages in an accident settlement?

Lost wages can be an important factor in a car accident settlement, and when they are added to the mix it means that your overall settlement figure will likely go up. Claims for lost wages include time off work due to medical treatment, but also includes a portion of future income you would have earned if not for the accident. Lost earning capacity is another term for future income.

There is a formula to estimate lost wages, and it’s not too difficult to figure it out. Just take the average weekly wage you were earning before the accident and multiply that by 2/3rds of the number of weeks you estimated medical treatment was required. Then add that amount to your special damages claim

How Much is My Car Accident Settlement Worth Calculator:

A car accident settlement calculator estimate is a great way to see how much your claim may be worth. It’s easy to get a car accident settlement estimate online, or you can do it yourself with this free online car accident settlement calculator. Keep in mind that these online tools are estimations only, and every car accident injury settlement will be different. The only true way to get an accurate calculation of what your car accident settlement will be, is to get a free consultation with a car accident lawyer that’s familiar with your state’s auto accident laws. Most personal injury lawyers offer a free consultation to ask questions and help figure out how much your car accident settlement is worth.

car accident settlement calculator

Sample Car Accident Injury Settlement Calculation:

The following is an example of a car accident claim that was settled for $62,500

The special damages for medical expenses totaled $20,000 and general damages were assessed at a 3 multiplier to get to a settlement of 20 x 3 = $60,000.00 + $2500 = $62,500 Here are the facts of this particluar car accident settlement:

  • Medical bills: $20,000 included ER visit, physical therapy, x-rays, MRI
  • Lost wages: $2500 for 10 days time off work
  • Other special/pain & suffering damages: none
  • Multiplier used for settlement: 3

Total car accident settlement amount: $20,000 x 3 = $60,000 + $2500 = $62,500 Final Car Accident Settlement Amount

Location, Location, Location – State Matters When Calculating Your Car Accident Settlement:

Keep in mind that you may need to drop your target settlement amount somewhat if your own negligence partially contributed to the accident. These are known as comparative negligence states. Depending on whether of not your state is one of the comparative negligence states, the law will require the award from a jury to be reduced by your level of fault. Most states say that if you 50% or more responsible for the accident, you cannot recover damages. A few, such as Virginia, say that if you are 1% responsible for the accident, you cannot collect damages at all.


If you’ve been hurt in a car accident, it can be difficult knowing how much your settlement might be worth. To make things easier for you and to help ensure that you get the most accurate calculation of what your claim may be worth, we recommend working with an auto injury lawyer who is familiar with your state’s laws and regulations related to determining damages from personal injuries. However, there are a number of online car accident settlement calculators also available, which can be a good starting point for your car accident claim

About Jessica Board, ESQ

Jessica Board is a graduate of the University of Iowa School of Law and is licensed in Iowa, Nebraska, and South Dakota. A member of the ABA Young Lawyer division, Iowa organization of Women Attorneys, and Defense Research Institute. With an undergraduate degree in finance, Jessica is passionate about educating individuals about how the law can help them recover the compensation needed to fully recover from injuries.