Find the right lawyer now

Formula for Car Accident Settlements

Find a Local Personal Injury Lawyer near You

Formula for Car Accident Settlements

Settling a car accident lawsuit with an insurance company is much more formulaic than you may think. Insurance companies keep great records of statistics, and do follow strict rules as to how much they can pay out to a claimant. This process becomes more complex when there are non-static damages like medical bills.

What Are Special Damages?

Special damages are a person's financial losses from a car accident. These do not include the damages to the car itself. Instead, they usually are limited to a person's medical bills, lost wages, and loss of capacity to earn an income.

Claims adjusters normally have a formula that they are required to follow when they settle these losses. They factor in the physical medical expenses, and use a formula to calculate an amount to cover for lost future wages. Any lost future wages are difficult to calculate because the injured party cannot say for certain that they can anticipate that they will definitely lose that much income in the future as a direct result of their injuries.


Since it is very difficult to calculate lost future wages and future medical expenses, insurance adjusters will use a multiplier. A multiplier is a number used to multiple the medical bills.

For example, if you are injured in a car accident that left you with lingering health problems, the insurance adjuster may use a multiplier of 3 against your medical bills. So, if the medical bills are $10,000, then the adjuster will multiply it by 3 and pay the injured $30,000.

Which Multiplier Will Be Used?

This is a very difficult question to answer. The insurance company will consider many factors, including:

  • The cost of the medical bills
  • Whether the injury can be connected to a preexisting condition
  • The amount of pain and suffering
  • Whether treatment was sought immediately to prevent more severe injuries
  • Whether the medical treatments were necessary
  • The circumstances of the accident (i.e. were you partially at fault)

Consulting an Attorney

If you do not think the insurance company is treating your case fairly, then you should contact a personal injury attorney. Your attorney may also do all the negotiations for you such that you do not have to go through the frustrating and agitating process.

Photo of page author Mabel Yee

, LegalMatch Legal Writer

Last Modified: 05-22-2018 01:20 AM PDT

Law Library Disclaimer
  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service
What is LegalMatch?

We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.