If someone else’s negligence injured you, you may recover compensation. This compensation can come through a settlement offer from the at-fault party’s insurance company.

A settlement is when the insurance company offers you a sum of money to resolve your personal injury claim without going to court. It’s a way for them to avoid a potentially costly trial verdict against them. For you, it can provide compensation more quickly than a drawn-out legal battle.

However, insurance companies are businesses. Their goal is to pay out as little money as possible on claims. So how do you know if a settlement offer is fair?

Generally, the first settlement offer will pay you an inadequate amount that doesn’t fully compensate you for your injuries, medical bills, lost wages, and other damages.

To find out whether you received a good settlement offer, call a personal injury lawyer near you for your free claim evaluation.

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Evaluating a Settlement Offer

To decide if a settlement offer is fair, you need a lawyer to determine the true value of your claim. This involves analyzing several key factors:

Medical Expenses

One of the largest components in calculating the value of a personal injury claim is your past, current, and future estimated medical costs. These costs can soar into the tens or hundreds of thousands of dollars, even for minor injuries.

Medical expenses you may recover include:

  • Emergency ground or air ambulance transportation costs to rush you to the emergency room after the injury-causing incident
  • All emergency room visits, triage care, diagnostic testing like CT scans/MRIs, emergency surgeries, intake observation, and other urgently required stabilization treatment
  • Follow-up appointments with physicians, surgeons, physical therapists, chiropractors, psychologists, pain management specialists, and any other necessary medical professionals during recovery
  • Inpatient hospital stays for surgeries, intensive care, monitoring, procedures like setting fractures, treating internal injuries, wound care, and other residential medical treatment
  • Prescription medication costs to manage pain, treat infections, aid healing and recovery, prevent blood clots/complications, etc. This includes future medication needs.
  • Durable medical equipment and supplies like crutches, braces, wheelchairs, walkers, hospital beds, oxygen, prosthetics, and any assistive devices/equipment required
  • Estimated costs for future anticipated medical needs like additional corrective surgeries, rehabilitation, skilled nursing care, medical device replacements, annual treatment cycles, etc.
  • Costs of necessary home and vehicle modifications like ramps, lifts, enlarged bathrooms/doorways, assistive hardware for disabilities, etc.
  • Transportation costs like mileage, public transit, hired car services to and from all medical appointments and treatment facilities
  • Incidental costs of medical care like paying for temporary lodging near treatment facilities, specialty medical nutrition/supplements, and any ancillary needs

Medical ExpensesYou need to calculate the full costs of all medical care received to treat your injuries, not just the portion your own health insurance paid.

The at-fault party must pay 100% of all reasonable and necessary medical expenses stemming from the incident that injured you—regardless of whether your own insurance covers it.

An experienced personal injury attorney knows how to accurately project future estimated lifetime medical needs and associated costs based on your specific diagnosis, prognosis, and extent of injuries. Failing to account for any medical expense can leave you undercompensated.

Lost Wages

If your injury prevented you from working, you are owed compensation for the wages you missed out on earning during your recovery.

This includes:

  • Lost income from time off work while treating your initial injury
  • Estimated future lost income if you cannot return to the same line of work
  • Lost earning capacity if the injury prevents you from making as much money as before

You need documentation like doctor’s notes, employer statements, and income records to prove your wage losses.

Pain and Suffering

This refers to the physical and emotional trauma of getting injured and going through the recovery process. It covers the non-economic damages you’ve suffered beyond just financial losses.

Pain and suffering in a personal injury case account for:

  • Physical pain endured from the injury itself: This includes agonizing pain from traumatic injuries like broken bones, burns, lacerations, etc. Even after initial treatment, you may experience lingering chronic pain, limited mobility, and discomfort during rehabilitation.
  • Pain and physical debilitation from medical treatments and procedures required for your recovery: This could include pain from surgeries, injections, wound care, therapeutic exercises, and other interventions meant to improve your condition.
  • Emotional and psychological distress caused by the traumatic incident: Many accident victims struggle with anxiety, sleep disturbances, PTSD, embarrassment from disfigurements, depression over disabilities, and other mental health challenges.
  • Mental anguish and loss of enjoyment of life: If your injuries prevent you from participating in former hobbies, activities, and quality time with loved ones that brought happiness and fulfillment.
  • Loss of consortium for spouses/partners: Accounting for the inability to have a normal intimate relationship, do household tasks together, or otherwise experience married/family life as before the injuries.

There is no precise mathematical formula to calculate appropriate pain and suffering damages. They are subjective. They are based on your specific injuries and struggles. They consider the degree of trauma, permanency of disabilities/disfigurement, and your personal accounts of suffering.

However, pain and suffering are a big part of personal injury settlements and trial awards. In some cases, they are as much as or even more than economic damages like medical bills and lost income. An empathetic attorney helps quantify these very real non-economic damages.

You can do this by giving day-in-the-life examples of your hardships. You can share therapeutic journal entries and photos of injuries. You can even use expert testimony from psychologists or counselors.

These things can all prove your need for pain and suffering compensation. While subjective, these damages reflect injuries’ profound physical, emotional, and lifestyle impacts beyond just economic losses.

Other Damages

Beyond medical expenses, lost wages, and pain and suffering, you may get compensation for:

  • Property damage repair or replacement costs: This could include repairs to a vehicle damaged in a car accident, replacement of other property like a bicycle or motorcycle, property inside a vehicle that was damaged or destroyed, and more. You may be entitled to the repair estimates or fair market value replacement costs.
  • Cost of hiring home health care services or residential facility care: For severe injuries requiring ongoing assistance with daily activities like bathing, dressing, eating, household tasks, mobility, and more, you can recover funds for professional home health aides or long-term care facility costs.
  • Loss of consortium damages for spouses/domestic partners: This compensates for the loss of companionship, intimacy, love, affection, comfort and solace you would reasonably expect to receive from your spouse/partner if not for the injuries inhibiting your normal marital/family life and relationship.
  • Household replacement services: If you are temporarily or permanently unable to perform regular household duties and chores like cleaning, yardwork, home maintenance tasks, cooking, childcare, etc., you can recover the costs of paying for reasonable replacement services.
  • Compensation for permanent disability, disfigurement or loss of limb/bodily function: When injuries result in permanent physical disabilities, scarring/disfigurement, or loss of organ/body part use, you may receive funds for the associated physical and emotional impacts, lifestyle adjustments, accommodations, etc.
  • Damage to reputation or earnings capacity in your trade/profession: For injuries impacting your ability to earn a livelihood, perform skills of your occupation, or impacting your professional reputation, loss of future earning capacity may warrant damages.

An experienced personal injury lawyer understands all ways to recover damages. They know what evidence to compile. This includes expert testimony, documentation, and analyses. They also know how to properly value and demand compensation for each type of damage.

Your attorney can make a compelling case on your behalf. They will do so by accounting for all economic damages: medical costs and lost income. They will also consider non-economic damages like pain, suffering, disability accommodations, and diminished quality of life. They will use this to see if an insurance settlement covers those losses or if the offer needs increased.

Factors That Affect Settlement Amounts

A good settlement involves more than just adding up damages. Other factors can impact what makes a good offer:


How clearly established is the other party’s fault or negligence that caused the injury?

If liability is obvious, like a rear-end collision where the trailing driver was clearly at fault, that strengthens your case. Solid evidence of negligence, like traffic camera footage, police reports citing violations, or third-party eyewitness testimony, can make the at-fault party’s liability indisputable.

However, if the fault is disputed and there are arguments over comparative negligence, you may need to accept a lower settlement rather than risk going to trial. Cases with ambiguous liability often result in lower payouts.

Severity of Injury

Severe injuries can cause permanent disability, disfigurement, or a much worse quality of life. These injuries deserve higher settlement valuations and compensation. Examples include paralysis, traumatic brain injury, loss of limbs, permanent scarring or disfigurement, and injuries requiring multiple surgeries or lengthy hospitalization.

Life-changing injuries that leave victims unable to work, walk, or live independently are valued highest. Big home changes, needs for medical equipment like wheelchairs, and long-term care costs all raise the settlement.

On the other hand, minor soft tissue injuries, like sprains, whiplash, or lacerations, heal in a few months. They may result in lower settlements. This is because they do not cause future earnings losses or disability.

Insurance Policy Limits

Insurance companies are only obligated to pay out up to the maximum liability limits of the at-fault party’s coverage. If your total damages from medical bills, lost wages, and pain/suffering are more than those policy limits, you may need to seek more money from the defendant’s personal assets. These include real estate, investments, or wage garnishment.

For example, say the negligent driver has only $100,000 in liability insurance. But, your damages total $500,000. The insurer may pay $100,000. But, you’ll need to sue the defendant to get the remaining $400,000.

Duration of Recovery

Longer recovery periods that require extensive medical treatment and physical rehabilitation increase the potential settlement value of a personal injury claim. Your injuries may require missing work for many months or years. This will lead to lost income, which raises compensatory damages.

Age and Employment

The age and employment status of the injury victim play a role in calculating damages, particularly future earnings losses and long-term care needs. All else being equal, younger people with higher income potential often receive valuations on the higher end of settlement amounts.

For example, a 25-year-old victim who suffered permanent disability would be owed greater damages for earnings they won’t realize over a 40+ year remaining career versus an older individual nearing retirement age with lower future earnings capacity. Youth and longer life expectancy increase exposure to future losses.

Conversely, retirement-aged individuals with no intention of returning to work may receive lower settlement amounts. This is because future income losses are negligible. However, long-term care costs for permanent disabilities sustained later in life still need compensation.

When to Accept or Reject

Accept or Reject an Settlement OfferIf you’ve been offered a settlement covering all your current and future losses, your lawyer will likely advise taking it. This provides financial compensation promptly rather than risking going to court and potentially walking away with nothing.

However, if an insurer has made a lowball offer that doesn’t come close to your calculated damages, it’s reasonable to reject it. You can negotiate further or pursue a personal injury lawsuit.

An injury lawyer can make persuasive arguments about why you deserve more compensation. Your argument will be based on your specific injuries, losses, and legal case strengths.

Working with an attorney also protects you from accepting a quick settlement before knowing the full healing implications and costs of your injuries. A lawyer ensures you aren’t persuaded to settle for far less than you may actually be entitled to for long-term care and disability.

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Ted Lorenz, Attorney for Personal Injury

Ted R. Lorenz, Personal Injury Lawyer

If you or a loved one has been injured due to someone’s negligence, don’t tackle the legal process alone. Let an experienced personal injury lawyer review the details of your case for free.

Contact a respected personal injury law firm in your area today for a free, no-obligation case consultation. You won’t pay any fees unless they win your case and recover financial compensation for you.

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