Personal Injury Compensation Guide: Get More for Your Claim

How to value a claim and maximize your personal injury compensation. Learn about types of damages, factors that can impact your payout, and more.

When you’ve been harmed by someone else’s negligence, you expect the at-fault party to compensate you for your injuries, property damage, and pain and suffering.

What is personal injury compensation?

Personal injury compensation is money paid to the injured party for damages caused by someone else’s negligence. Typically, the responsible party’s insurance company pays the injured person a negotiated settlement amount.

This personal injury compensation guide covers the value of your damages, average payouts, who pays your compensation, when and how to file a personal injury claim, and what to expect from the claim process.

You’ll also learn how factors like shared fault and medical liens impact the amount of settlement money you get to keep.

How to Value a Personal Injury Claim

Injury compensation is based on the cost of your damages, like medical bills, lost income, replacement services, and emotional distress. Including proof of all your damages increases your claim value. Without some type of physical injury, it will be difficult to justify your claim.

For mild-to-moderate injuries, you can figure out a fair estimate of your claim value on your own. Simply add up all your hard costs, then add one to two times that amount to account for your pain and suffering.

Compensation for serious injuries must be calculated by an experienced personal injury attorney. The claim value of catastrophic or permanent injuries should include the cost of future medical care and a larger amount to account for pain and suffering. There’s too much at stake in serious injury claims to pursue compensation without an attorney.

How much is an average personal injury settlement?

Most personal injury claims settle out of court in a range from $5,000 to $75,000. The average auto insurance bodily injury claim settled for around $15,500. ¹

Notably, personal injury cases that end up in court don’t always result in huge payouts. Half of all jury awards in tort cases were $30,000 or less, while 75 percent came in under $152,000. ²

Types of Personal Injury Damages

There are two main types of damages in a personal injury claim:

Economic damages, also called hard costs or special damages, are expenses that are measurable and verified by bills, receipts, and other documentation.

Non-economic damages, also called general damages or pain and suffering, are harder to justify because there is no objective measurement.

Economic damages can include:

  • Medical expenses
  • Replacement services
  • Transportation costs
  • Lost wages

Medical treatment expenses: The cost of treating your injuries is a major factor in the total value of your claim. Gather all bills related to your medical care, including invoices from ambulance services, medical facilities, physician bills, physical therapy, medications, and medical equipment.

Don’t overlook related bills. If you have an X-ray or CT scan, there will be a bill from the imaging facility and another bill from the radiologist who interprets the results.

Use the full value of each expense for your settlement calculations, even if most or all of the bills were covered by Medicare, Medicaid, the VA, or private healthcare coverage.

Insurance companies only have to pay for reasonable medical expenses. Don’t be tempted to use an “accident doctor” who runs up your bills with unnecessary tests or treatments. You might be stuck with the cost of bills the insurance company won’t pay.

Replacement services: The cost of services you’d have done yourself if you weren’t injured. These might include lawn care, housekeeping, childcare, snow removal, and more.

Transportation costs: You can request reimbursement for mileage and parking when traveling back and forth to medical appointments, or the cost of taxi rides.

How much does a personal injury claim pay for lost wages?

You are entitled to compensation for lost wages, even if the days off work are covered by vacation or sick leave. The insurance company won’t argue about lost wages that are excused by a doctor’s note and make sense in the context of your injuries and occupation.

Ask your employer for a written statement of lost wages. If you are self-employed you can use profit and loss statements, copies of communications with clients reflecting your reduction in earning capacity, and documentation showing your typical income prior to the accident.

Non-economic damages can include:

  • Physical pain and suffering
  • Emotional distress
  • Fear and anxiety
  • Humiliation
  • Loss of consortium
  • Depression
  • Side effects from medication

How much is a typical pain and suffering settlement?

It’s reasonable to ask for one or two times the amount of your hard costs to account for your pain and suffering, but you have to convince the adjuster to pay. Insurance adjusters are usually willing to pay a few hundred dollars for your “inconvenience” and act like they are doing you a favor. To get more than that for a minor injury claim, you have to do some work.

You can justify the amount of pain and suffering compensation by using descriptive language to explain your agonizing pain, cold sweats and night terrors, heartbreak and sadness, loss of companionship, and so on.

Keeping an injury diary is an excellent way to track the physical pain and mental anguish you endured from the accident and throughout your recovery.

Steps to Getting a Personal Injury Settlement

Personal injury claims typically settle out of court, following the same general steps:

  1. Notification: As soon as possible after the accident, provide the at-fault party or their insurance company notice of your intent to seek compensation for your injuries.
  2. Gather evidence: Collecting evidence begins at the scene of your injury and continues through your recovery.
  3. Demand compensation: After calculating the value of your claim, a demand letter and supporting documents are sent to the insurance company.
  4. Negotiations: After the adjuster responds to the demand for compensation, you or your attorney will engage in a few rounds of settlement negotiations.
  5. Final settlement: The agreed-upon terms are stated in a written settlement and release agreement. After signing the agreement, a check is mailed to the claimant or their attorney.

Who Pays Your Personal Injury Settlement?

Whether you’re in a car accident, slip and fall, or injured by a dangerous product, your injury settlement will almost always be paid by the at-fault party’s insurance company.

When should you file a personal injury claim?

File an insurance claim as soon as possible after the event that caused your injuries. You don’t have to be ready to negotiate when you file your claim. Negotiations can wait until after you’ve recovered.

What Happens After You File a Claim for Compensation?

Once you’ve filed a claim for compensation, the insurance company will give you a claim number and assign your claim to an adjuster. In auto accidents, your vehicle damage and injury claims might be handled separately, with different claim numbers and adjusters.

Don’t be surprised if the adjuster reaches out with a fast settlement offer. Adjusters are rewarded for settling injury claims quickly, for as little money as possible. You’re better off waiting until you’ve fully recovered to discuss settlement.

You may be asked to provide a recorded statement. Most personal injury lawyers advise against giving a recorded statement without legal advice. Adjusters are trained to trick you into saying things that can hurt your claim. In any case, never agree to a recorded statement when you are tired, upset, medicated, or in pain.

Take your time to recover. If you decide to handle your own claim, use the time to collect evidence and prepare for claim negotiations.

Is there a time limit for filing a claim for personal injury compensation?

Every state has a statute of limitations for settling a personal injury claim. If you haven’t settled your claim or filed a personal injury lawsuit before the statute expires, you forfeit your right to compensation. The insurance company doesn’t always have to tell you when time is running out.

Factors That Can Influence Personal Injury Awards

Every personal injury case is different, involving factors that will impact your potential compensation:

  • Shared Fault: Most states have personal injury laws the adjuster will use to reduce or deny your compensation, depending on your share of blame for causing your injuries.
  • Wrongful Death: Family members can expect a maximum settlement amount when the deceased shared no blame for the accident.
  • Insurance Policy Limits: The at-fault party may not have enough insurance to pay for all your damages. Or, multiple accident victims are injured and there’s not enough bodily injury coverage to go around.
  • Lack of Evidence: Without strong evidence of the other party’s fault, or proof of your injuries, the insurance company may only offer a “nuisance value” to settle your claim.
  • Punitive Damages: Punitive damages are high-dollar court awards in addition to compensatory damages when the at-fault party’s actions are found to be particularly reprehensible.
  • Liens: Common liens that must be paid from your settlement proceeds include medical liens from doctors or hospitals; insurance liens from Medicare, Medicaid, the VA, private health care insurers, or workers’ compensation; and past-due child support.

Financial Issues with Personal Injury Claims

Personal Injury Compensation Questions