FAQs: How Much Can You Recover?
How does car accident compensation work, and how much can you recover? Learn how the insurance companies calculate car accident compensation and how lawyers for auto accidents can help you recover.
If you are like most people who have been injured in a collision, you have lots of questions. How does car accident compensation work? How do the insurance companies calculate car accident compensation? How much can local lawyers for auto accidents help you recover?
All of these questions are important, and you need to know the answers in order to make informed decisions about how to handle your insurance claim. If you want to make sure your receive maximum compensation for your injuries, here’s what you need to know:
How Does Car Accident Compensation Work?
The methods used to calculate car accident compensation are determined based on two key factors: (i) who was at fault in the accident; and, (ii) whether your state has a “no fault” or fault-based auto insurance law.
1. Filing an Auto Insurance Claim
In most cases (in fact, the substantial majority of cases), recovering compensation after a car accident means filing an auto insurance claim. This is what auto insurance is for, and everyday thousands of people across the United States file car accident insurance claims.
For many people, recovering compensation starts with filing a claim under their personal injury protection (PIP) or medical payments (MedPay) policy. These policies are mandatory in some states and optional in others, and they provide “no fault” compensation for the direct financial costs associated with car accident injuries. Personal injury protection provides coverage for medical expenses and lost wages, while MedPay covers medical bills only.
If the other driver was at fault in your car accident, then you can also seek compensation under his or her bodily injury liability (BIL) policy. How BIL insurance works is that it covers other drivers’ and passengers’ accident-related costs when the insured driver is deemed legally at fault in an accident. So, for example, if you were injured in an accident caused by a distracted driver, then you can file a BIL claim under the distracted driver’s policy—in addition to filing a PIP or MedPay claim if you have the coverage available. When filing a BIL claim, it is extremely important to accurately calculate car accident compensation, as the amount you are entitled to recover could be substantial.
2. Filing a “Third Party” Claim
Car accident compensation works differently if someone other than the other driver is to blame for the accident. In this scenario, it will be necessary to hire a attorney for car accidents to file a “third party” claim on your behalf. For example, if your brakes failed, or if the other driver’s employer is liable for negligent hiring or entrustment, then you would file a claim against your car’s manufacturer or the other driver’s employer directly. This might lead to a settlement with the company’s liability insurer, or it may involve asserting your legal rights in court.
Regardless of what type of claim (or claims) you have, it will be important to preserve any and all evidence that is available. This will require you to hire a lawyer for auto accidents to conduct an investigation.
What Costs Does Car Accident Compensation Cover?
Unless you are limited to filing for PIP or MedPay (i.e. if you only suffered very minor injuries), your car accident compensation should cover all of the costs you incur as a result of the collision.
These costs fall into two categories: (i) financial losses, and (ii) non-financial losses.
1. Financial Losses
Any direct out-of-pocket costs (i.e. medical bills) you incur as a result of your accident are financial losses that you can recover. Financial losses also include lost income and benefits—both now and in the future. When calculating compensation for your car accident, it is absolutely essential to ensure that you have a clear understanding of the future costs of your injuries. Once you settle, your claim will be over, and you will not be able to recover any more for your losses.
2. Non-Financial Losses
Non-financial losses are those loses which do not impact your bank account, but which impact your life in different ways. The most well-known form of non-financial loss is pain and suffering, but there are many other forms of non-financial loss for which compensation is available as well. While these vary from state-to-state, the other main categories of non-financial losses include:
- Emotional trauma or emotional distress
- Post-traumatic stress syndrome (PTSD)
- Scarring and disfigurement
- Loss of companionship and consortium
- Loss of enjoyment of life
- Loss of services and support
- Loss of society
Bodily injury liability (BIL) insurance covers all of these types of losses, and you can seek compensation for these losses in “third party” car accident claims as well. In order to make sure you are seeking the full compensation you deserve, you should contact one of the many local lawyers for auto accidents who knows how to accurately calculate car accident compensation.
How Much Can Lawyers for Auto Accidents Help You Recover?
The amount of compensation you can recover after a car accident is determined based on your personal financial and non-financial losses. As a result, the only way to determine how much you can recover is to have your claim assessed by a lawyer for auto accidents near you.
1. How Much Insurance Coverage is Available?
However, there are some general principles and guidelines that you can keep in mind. For example, if you are only entitled to compensation for your car accident through PIP or MedPay, then the amount that you can recover will be capped at your policy limit. PIP and MedPay policy limits are usually around $10,000, though some drivers choose to purchase additional coverage.
If you have a fault-based auto insurance claim, then the amount you can recover might be capped by the driver’s BIL policy limit. However, there are some circumstances in which accident victims can seek compensation above and beyond the at-fault driver’s policy limit. If you (and/or a member of your household) has purchased uninsured/underinsured motorist (UIM) coverage, then you can use this coverage to seek additional compensation.
What about “third party” claims? As we mentioned above, these are usually covered by insurance as well, and companies’ liability policies typically have limits that are much higher than those for personal auto insurance coverage.
2. How Much are Your Actual Losses?
Of course, if your losses are less than the available insurance coverage, then the amount you can recover will be limited to your actual losses. Keep reading to learn how the insurance companies calculate car accident compensation.
How Do the Insurance Companies Calculate Car Accident Compensation?
When it comes to how to calculate car accident compensation, the process is different for financial and non-financial losses. Calculating financial losses is more straightforward, while calculating non-financial losses requires an understanding of the legal principles that apply.
1. Calculating Compensation for Financial Losses
There are two steps to calculating compensation for your financial losses after a car accident. The first step is to calculate the costs you have incurred to date. Remember, this includes not only medical expenses and other out-of-pocket costs, but your loss of income and benefits as well. You will need to add up all of your receipts (paying by check or credit card can help you keep track), and you will need to obtain records from your employer that show your daily wages or salary as well as the days that you have missed from work.
Calculating your future losses is more difficult, and this is one area where you will need help from a local lawyer for auto accidents. Your lawyer will need to review your medical records and work with your doctor to understand both (i) how much money you will need to cover your treatment and therapy costs in the future, and (ii) how long you are likely to be out of work (or limited in the job duties you are able to perform).
2. Calculating Compensation for Non-Financial Losses
Auto insurance companies calculate car accident compensation for non-financial losses using two primary methods. You will need to talk to one of your local lawyers for auto accidents to find out which method will be (or should be) applied in your case. The two methods of calculating compensation for non-financial losses are:
- The “per diem” method. With the “per diem” method, the insurance companies determine a daily rate of compensation, and then this rate is multiplied by the number of days that you are expected to experience the non-financial effects of your car accident.
- The “multiplier” method. With the “multiplier” method, once your financial losses have been calculated, this sum is then multiplied by a number (usually between 1.5 and 5) which is determined based upon the extent of your injuries and the other circumstances involved with your claim.
If you have been injured in a car accident, there is much more you will need to know before you settle your claim; and, again, you need to be extremely careful to avoid settling too soon. Local lawyers for auto accidents can help, and you can get an assessment of your claim at no cost to you.