Behind the Numbers: How Car Accident Settlements are Really Calculated

car accident

Did you know that every year around 1.35 million people die in road crashes? If you were recently in a car accident and are wondering how much you are eligible to receive as far as compensation, LivingBetter50 is here to help. We put together this short guide to share more information about how settlements are calculated with an auto accident settlement formula.

Keep reading to learn the ins and outs of the auto accident settlement evaluation formula.

Information Needed

The most common formula used to calculate your compensation after a car accident is the total cost of your car repairs and your injuries. There is a bit of information that is needed to make an estimate for how much you are entitled to. You will need the initial value of your vehicle, the mileage at the time of the accident, the amount that was depreciated, and the condition of the vehicle before the accident. 

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The costs of the repairs are calculated by the specific parts that are being replaced, and how much the labor will be in total. The most difficult part to calculate is the cost of the injuries since there truly is no market price for a type of injury or for a body part. 

It is best to speak with an experienced and reputable attorney such as Sweet Lawyers to help you figure out what you deserve as far as injuries go. 

Multiplier Method

Many insurance adjusters use a multiplier method when they are making calculations on how much to payout. With this method, the adjuster will total up the medical bills that occurred from the accident and they will multiply it by a number between 1-5 (the certain factor). The higher the number the more pain and suffering they feel the person has gone through.

Then they will take that total number and add the lost income amount, medical special damages amount, and general damages. 


There are so many variables when it comes to determining an exact amount. For example, is your injury completely new because of the car accident, or did the accident make a previous injury worse? They will also take note of whether or not you sought medical attention right after the accident or if you waited a while before going to the doctor. 

Your career, your age, and your health at the time of the accident will be other variables that the adjusters take into consideration. 

Now You Know the Auto Accident Settlement Formula

We hope that now that you are aware of the auto accident settlement formula you now have a better idea of how much compensation you can expect. Unless you have experience with the laws in your city or state, please do not hesitate to contact an experienced attorney to make sure that you do not get the short end of the stick. 

Did you find this article helpful? Please keep browsing around the rest of this section for some more helpful life tips and tricks.

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1 thought on “Behind the Numbers: How Car Accident Settlements are Really Calculated”

  1. Pingback: 5 Tips for Negotiating a Fair Auto Accident Settlement - Mid State Law

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Behind the Numbers: How Car Accident Settlements are Really Calculated
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