How car accident settlements are calculated.

The formula

Total = (Economic damages × (1 + Multiplier)) × (1 − Your fault %), capped by available insurance coverage.

Step-by-step

1. Add up economic damages. Past medical bills, future treatment, lost wages, lost earning capacity, property damage, out-of-pocket costs.
2. Pick a severity multiplier. 1.5x for soft-tissue with full recovery, 3.5x for surgery, 5x for permanent impairment, higher in catastrophic cases.
3. Calculate non-economic damages. Multiply economic damages by the multiplier.
4. Sum. Economic + non-economic = gross claim value.
5. Reduce for fault. Most states reduce by your percentage of fault.
6. Apply policy limits. If the at-fault policy is $50,000 and your case is "worth" $200,000, the practical settlement is often the policy limit unless additional coverage (UIM, umbrella) applies.

Worked example

Rear-end collision, herniated disc, no surgery, three months of physical therapy. Medical bills $14,000, lost wages $3,500. Severity: minor fracture / moderate (multiplier 2.5x). Comparative fault: 0%.

• Economic damages: $14,000 + $3,500 = $17,500
• Non-economic damages: $17,500 × 2.5 = $43,750
• Gross: $61,250
• Fault adjustment: 0%
• At-fault policy: $100,000 (sufficient)
• Likely settlement range: $45,000, $75,000

First insurer offer in a case like this is often $20,000 to $30,000. The gap is bridged by documentation and patience, not by argument.

Then see what your claim is worth and how contingency fees affect your take-home.