How Are Car Accident Settlements Calculated in California?

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Despite taking all the necessary precautions to mitigate the risks of a collision, you can still be seriously injured due to another driver’s negligence. Unfortunately, car accidents are pretty common in California, and it is rare for the victims to walk away unscathed. Many victims are burdened with life-altering injuries that change the course of their lives. If you were seriously injured due to another driver’s negligence, you may be entitled to significant compensation for your damages. Please continue reading to learn how California car accident settlements are calculated and how our adept Santa Clara County Car Accident Attorneys can help you fight for the just compensation you deserve. 

How are California Car Accident Settlements Determined?

To understand how your compensation is calculated, you first need to comprehend the damages you may be entitled to receive following the accident. It’s crucial to figure out what your claim is worth to ensure you receive a fair settlement for the damages you’ve suffered. Generally speaking, there are three categories of damages:

  • Economic damages: These losses represent compensation for objectively verifiable monetary losses. Essentially, it refers to your out-of-pocket expenses. This includes past and future medical bills, lost wages, vocational rehabilitation, property damage, household services, etc.
  • Non-economic damages: These losses represent compensation for subjective, non-monetary losses that are not quantifiable. This includes pain, suffering, emotional distress, inconvenience, loss of consortium, loss of enjoyment of life, etc.
  • Punitive damages: These losses represent compensation for punishment. This type of compensation is meant to deter actions motivated by malice. This type of damages is rarely awarded.

While there may not be a universal settlement formula to estimate the value of a car accident claim, insurance companies generally use either the multiplier or the per diem (daily rate) method.

What’s the difference between the multiplier and per diem method?

The multiplier method is the most common approach insurance adjusters use to value a car accident claim. This method adds up all of your economic damages and multiplies the total by a number between 1 and 5. This number represents the severity of your injuries. During negotiations, the sticking point is the multiplier used, as you’re likely going to argue for a higher multiplier while the insurer will want to use a lower multiplier. The total number after the multiplication will determine the amount for your settlement.

The per diem method, on the other hand, is often utilized if your injuries are less severe. It calculates your pain and suffering by assigning a dollar amount for every day you had to live with the pain caused by your accident. Essentially, the amount of funds per day is multiplied by the days it takes you to complete a medical recovery. During negotiations, the sticking point is justifying the daily rate.

For more information on how California car accident settlements are determined, please don’t hesitate to contact a determined Santa Clara County car accident attorney. At the Law Offices of Brian J. O’Grady, we are prepared to help you fight for the maximum compensation you’re entitled to for your damages.