When you have suffered injuries in an accident, determining what a reasonable settlement offer is can be challenging. This guide will help you understand what factors go into evaluating a settlement offer and what you can expect during the process. Whether you’re in Colorado, Arizona, New Mexico or California, this information will help you better understand personal injury settlement offers.
What Is a Reasonable Settlement Offer for Injuries and Damages?
A good settlement compensates you fairly for the damages and losses you’ve suffered due to an accident. It should cover damages such as medical expenses, pain and suffering, lost wages and property damage.
Medical expenses can include past, present and future costs related to the injury. Lost wages can include any income you’ve lost due to being unable to work. Pain and suffering compensation is for the physical pain and emotional distress caused by the accident. Property damage may include vehicle damage or damage caused to other property as a result of the accident.
A fair settlement takes into account all the economic and non-economic damages that you have suffered. Economic damages are those that have a specific monetary value, such as medical bills and lost wages. Non-economic damages are more subjective and include damages like pain and suffering, emotional distress and loss of enjoyment of life.
Comparative Negligence
Settlements in states such as Colorado, Arizona, New Mexico and California are impacted by comparative negligence. This means that if you are found to be partially at fault for the accident that caused your personal injuries or other damages, your compensation may be reduced by your percentage of fault.
Colorado uses modified comparative negligence, meaning that plaintiffs can receive compensation for damages as long as they are less than 50% at fault for the accident. For example, if you are found to be 30% at fault for an accident in Colorado, your settlement amount will be reduced by that percentage. If you are 51% at fault, you will not be entitled to compensation.
Arizona, New Mexico and California use pure comparative negligence. Under this system, plaintiffs can receive compensation for damages regardless of their percentage of fault. For example, a plaintiff who is found to be 90% at fault will have their settlement amount reduced by 90%, leaving them with 10% of the original settlement amount.
How Do You Evaluate a Settlement Offer?
The best way to evaluate a settlement offer is to work with an experienced personal injury attorney. Consulting with an attorney can provide a more accurate valuation of your case. They can help you understand the potential range of settlements based on similar cases and the specifics of your situation. Here’s an overview of how settlement offers are evaluated:
Calculation of Damages
The first step to evaluating your settlement offer is to calculate your damages. Add up all your medical expenses, including ongoing and future treatments. Consider any wages you’ve lost and may lose in the future. Additionally, you should estimate a reasonable amount for pain and suffering, loss of enjoyment and emotional distress.
For instance, if you have ongoing medical treatments that will be required in the future, it is imperative to get a medical professional to provide an estimate of these costs. You should include this future estimate in your total medical expenses. Additionally, if your injuries prevent you from returning to your previous job, or if they reduce your earning capacity, you need to factor this into the calculation of lost income.
Liability Assessment
The next thing to take into consideration is liability. You should assess the strength of the evidence proving the other party’s fault. Liability plays a significant role in the negotiation process. The stronger your case, the more likely you are to receive a favorable settlement.
Evidence such as police reports, witness statements and medical records can help establish the other party’s liability. For example, if you were in a car accident and the police report indicates the other driver was at fault, this can significantly bolster your settlement claim. However, if you were partially at fault, as determined by the evidence, your settlement amount will be adjusted accordingly.
Insurance Coverage Limits
Another important item to review is the limit of insurance coverage. The at-fault party’s insurance policy limits might not be high enough for the compensation you need.
Insurance policy limits are an important factor in settlement negotiations, as they may make it difficult to receive compensation for the damages you have suffered. If the cost of your damages exceeds the limit of the other party’s insurance, you may need to seek additional compensation through other avenues, such as your own underinsured motorist coverage.
What Is the Usual Result of a Settlement?
Most personal injury cases settle out of court. This means both parties agree on a compensation amount without going to trial. The usual result of a settlement includes a negotiated agreement, release of liability, and payment. Settling out of court is generally preferable for both parties, as it avoids the time, expense, and uncertainty of a trial.
One of the primary reasons why settlements are favored is the predictability they offer. By settling, both parties have control over the final agreement, which can reduce stress and anxiety for the injured party. Moreover, the legal process for a trial can be lengthy, sometimes taking years to reach a conclusion. This prolonged timeline can be emotionally and financially draining.
Settling out of court also allows you to receive compensation more quickly and move on with your life. Once you reach a settlement, the parties can typically initiate the payment process without the delays associated with court proceedings. This prompt payment can be crucial for covering medical bills, lost wages and other expenses that accumulate during the recovery period.
Additionally, the process of reaching a settlement often involves negotiation, where both sides can discuss and agree upon acceptable terms. This negotiation can include not just the monetary amount but also other terms such as payment schedules and confidentiality agreements.
Additional Benefits of Settling Out of Court
Another benefit of settling out of court is the privacy it offers. Court trials are public, which means details of your case and personal life can become part of the public record. Settlements, on the other hand, are usually private agreements between the involved parties. This privacy can be particularly important for individuals who prefer to keep their personal matters confidential.
Furthermore, avoiding a trial means avoiding the adversarial nature of courtroom proceedings. Trials can often become contentious, with each side presenting evidence and arguments against the other. This adversarial process can be emotionally taxing. In contrast, settlement negotiations tend to be more collaborative, focusing on finding a mutually agreeable solution rather than winning a battle.
The usual result of a settlement includes a negotiated agreement, release of liability, and prompt payment. Settling out of court is generally beneficial as it avoids the unpredictability, time and costs associated with trials. It also ensures quicker compensation, privacy and a less adversarial process, allowing you to focus on your recovery.
Factors Influencing Settlement Amounts
Several factors can influence the settlement amount you receive. These can include the severity of injuries, impact on daily life, evidence quality and state-specific laws.
More severe injuries typically result in higher settlements due to higher medical costs and a greater impact on your life. For example, a person with a severe spinal injury resulting in permanent disability will likely receive a larger settlement than someone with a minor fracture that heals completely in a few weeks.
If your injury significantly affects your daily activities or ability to work, your settlement may be higher. For example, if you were an active individual who ran marathons, but your injury now prevents you from participating in such activities, you can factor this loss of enjoyment into your settlement. Additionally, if the injury compromises your ability to perform your job, leading to a reduction in earning capacity, this may also influence the settlement amount.
Strong evidence supporting your claim can lead to a better settlement offer. Documentation such as medical records, accident reports, witness statements and expert testimonies can strengthen your case. For instance, detailed medical records from your healthcare provider that clearly document the extent of your injuries and the necessary treatments can significantly impact the settlement negotiations.
Each state has unique laws affecting personal injury settlements. For instance, Colorado’s modified comparative negligence rule means your settlement amount will be reduced by your percentage of fault. If you are at least 50% at fault, you will not be eligible for any compensation. The pure comparative negligence rules of Arizona, New Mexico and California let you seek compensation as long as the other driver is at least 1% at fault.
Common Mistakes to Avoid
When dealing with settlement offers, common mistakes include accepting the first offer, ignoring future expenses, rushing the process and not documenting everything. To ensure you receive the compensation you deserve, it’s important to avoid making these mistakes.
Accepting the First Offer
Insurance companies often start with a low offer. Evaluate it thoroughly before accepting. The initial offer from an insurance company is typically lower than what you might be entitled to.
Insurance adjusters aim to minimize payouts to protect their company’s bottom line. It’s important to carefully review and assess the initial offer in the context of your total damages. Consulting with a personal injury attorney can help you determine whether the initial offer is fair or if you should negotiate for a higher amount.
Ignoring Future Expenses
Consider future medical treatments and long-term impacts on your earning potential. If your injuries require ongoing medical care or rehabilitation, or result in permanent disability, you should factor these future costs into your settlement.
Ignoring future expenses can lead to financial hardship down the line. For example, if you settle for an amount that only covers your current medical bills but later need surgery related to your injury, you would have to cover those costs out of pocket.
Rushing the Process
Take your time to understand the full extent of your injuries and losses before settling. It can be tempting to settle quickly, especially if you are facing financial pressures due to medical bills and lost income. However, rushing the process can lead to accepting a settlement that is insufficient to cover your long-term needs.
Ensure that you have reached maximum medical improvement (MMI) before considering a settlement. MMI is the point at which your condition has stabilized, and no further significant improvement is expected. Settling before reaching MMI can result in underestimating your future medical expenses and overall damages.
Not Documenting Everything
Keep detailed records of all expenses, medical treatments and communications with the insurance company. Documentation is critical in supporting your claim and negotiating a fair settlement. Maintain a comprehensive record of medical visits, treatments, medications, and any out-of-pocket expenses related to your injury.
Additionally, keep copies of all correspondence with the insurance company, including emails, letters and notes from phone calls. This documentation can provide essential evidence if there is a dispute about the extent of your damages.
What Is a Reasonable Settlement Offer?
Determining what a reasonable settlement offer is requires careful consideration of various factors, including the specifics of your case and state laws. By understanding what goes into a settlement and evaluating offers thoroughly, you can ensure you receive fair compensation for your injuries.
The settlement process can be complex and overwhelming, but you don’t have to go through it alone. At Sargon Law Group, our Phoenix personal injury attorneys help accident victims receive the compensation they deserve in Colorado, Arizona, New Mexico and California.
If you’ve been in an accident and you’re wondering what is a reasonable settlement offer for your case, contact us at Sargon Law Group today for a free consultation. We can evaluate your case and help you seek the maximum settlement possible. We provide all clients with the highest level of service so they can focus on their recovery and move forward with their lives.