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A Basic Guide to Calculating Personal Injury Settlements

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An Essential Guide to Calculating Personal Injury Settlements

Accidents come with a lot of uncertainties. To begin with, you might be nursing an injury whose fate you don’t really know. It could lead to permanent disability or healing. Besides, you may lag in paying bills due to your inability to work. Several months of lost wages could also mean you can’t put food on the table as you used to before the accident. And that’s not to mention the emotional turmoil you’ll have to endure. 

An excellent way out is filing a personal injury claim. While it won’t reverse the injury in any way, the cash received will help you settle medical bills and other unforeseen expenses related to the injury. 

In this regard, it helps to understand how personal injury settlements are calculated. Knowing the details is critical in arguing your case, ensuring you get fair compensation. Moreover, the need to hire legal counsel can never be overemphasized. They’re experienced in such cases and know exactly what it takes to win. A local one with a firm grasp of your state’s law is even more ideal. For instance, you’d want a Salt Lake City personal injury attorney if you live in or around this Utah capital. 

This guide provides all the necessary details for the calculation.

Fundamental principles of personal injury settlements

Personal injury encompasses all manner of harm to your body, mind, or emotions. It could be a broken bone, bruise, burn, spinal cord injury, laceration, sprained ankle, torn ligament, concussion, or mental trauma.

Cases of personal injuries are way too common. In the U.S., in 2020 alone, 24.2 million people visited emergency departments for unintentional injuries.  

Legally speaking, if someone harms you, whether intentionally or accidentally, you deserve compensation. That’s because you’ll incur expenses you’d not planned for. Furthermore, you may lose your earnings if the injury makes it impossible for you to work as usual. Compensation attempts to restore balance in your life and the law recognizes this.

Critical factors that determine the compensation amount

The amount of money you’ll receive as compensation for personal injury depends on the following factors:

  • Medical expenses

Medical expenses are synonymous with personal injuries. You can’t stay home nursing a broken bone or dislocated spinal cord. You must see a specialist for treatment. Also, you may need to engage the services of rehabilitation therapists if the accident interfered with the ability to move your limbs. Future medical expenses are also factored in. 

Remember, healthcare costs keep rising at an alarming rate. Spending on healthcare in the U.S. rose by about USD $ 1 trillion between 2009 and 2019. Thus, you must factor in inflation if treatment for your condition will continue for several years.   

  • Loss of earnings

An accident may make it impossible to go to work. Thus, you’ll lose income. Mark you, this might go on indefinitely if you get a permanent disability. If not, you may not be able to work as many hours as you used to, meaning reduced earning potential. Factoring in all these in the settlement equation is crucial.

  • Pain and suffering

Emotional distress, though tricky to quantify, is included in the settlement equation. This includes mental anguish and any loss of enjoyment of life. It’s a necessary inclusion because it’s brought about by the injury. If you weren’t injured, you wouldn’t be suffering emotionally to such an extent.

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  • Property damage

Personal injury settlements usually include compensation for property that was damaged during the accident. It could be a broken laptop or a damaged car. These items have value and can’t be ignored during the calculations. 

It helps to note that every case is unique. Two people can be injured in similar but separate accidents, but their compensation may vary in amount to a great degree.

What role does fault play in settlement calculations?

If your injury results from someone else’s negligence, they’re at fault. If you’re 100% innocent and they’re 100% at fault, you’ll get a higher compensation. However, if you bear some degree of fault, the compensation amount may be reduced proportionally.  

For illustration, assume you were driving slightly over the speed limit on a given road stretch. The driver behind you ignores a stop sign and collides with your car. While they were wrong to skip the sign, your speed also played a role in the accident. Thus, you share the fault. Analysts may peg your fault at, say, 30%, meaning your compensation will be less than 30%. If the full settlement for your specific case was USD$ 100,000, you’ll get only USD$ 70,000.

Another example is when you’re walking while chatting on your phone, and you trip on a cracked sidewalk. While the property owner is to blame for the accident, the fact that you were not fully concentrated on walking can’t be ignored. Your fault percentage will be calculated and factored in the settlement computation. 

Knowing these dynamics is crucial. You’ll set realistic expectations instead of being over-ambitious about the potential settlement amount.  

Time limitations

Personal injury claims have time limitations, beyond which your case is invalid. The period varies by state, but it’s usually between two and four years. For instance, Alabama, Alaska, and Arizona have a two-year statute of limitations, Maryland, Massachusetts, and Montana three years, and Nebraska, Utah, and Wyoming four years.

Typically, the time is counted starting from the day the accident occurs. However, in instances where the injury leaves you unconscious, or it’s hidden, and you’re not immediately aware of it, the clock on the statute of limitations may start later. An example is when a surgeon leaves an instrument in your abdomen during an operation. You may not be immediately aware of its presence until it starts hurting.

All in all, don’t wait until the deadline so you start rushing to file your claim. It’s best to do it as early as possible when all details of the incident are fresh in your mind. Moreover, delays may lessen the perceived severity of the injury, as all concerned will wonder why you took so long to bring up the matter. Acting promptly shows your seriousness in pursuing compensation.

Negotiating with insurance companies

Normally, it’s insurance companies that pay out personal injury settlement claims. It helps to know these firms are in business and would always aim to pay the least amount to preserve their bottom line. Thus, you must be prepared to negotiate hard.

Arm yourself with adequate evidence. Furthermore, never accept their first offer, as it’s always an underestimate. Stand firm and bargain skillfully until you reach a reasonable settlement.  


In personal injury settlement, every detail counts and determines how much compensation you’ll get. So, gather all the necessary evidence for a high-potential case. Moreover, understand all factors that determine the amount you receive. Couple this with the help of an experienced attorney, and you’ll get fair compensation. 

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