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Calculating Car Accident Damages

Published January 23, 2023

Car accidents are the most common cause of personal injury claims in the United States by a significant margin. Nationwide, there are an average of six million car accidents, causing around three million injuries, two million resulting in permanent injuries, and more than thirty thousand fatalities annually. When a car accident occurs, determining which party is at fault and the damages they are responsible for paying can be convoluted and contentious. Often, the knowledge and expertise of a forensic economist are required to determine accurate special damage calculations for car accident settlements.

With over thirty years of professional experience, The Knowles Group has provided car accident damage calculations and expert witness testimony for personal injury lawyers representing both plaintiffs and defendants across North America. Contact us today to schedule a free consultation and discuss how our services can strengthen your case.

Types of Damages in Car Accident Cases

Car accident damages refer to the financial compensation awarded by the insurance company of the at-fault party to the injured party in a car accident personal injury settlement. The two primary damage categories included in the settlement value are economic and non-economic, also referred to as special and general damages.

  • Economic, or special, damages are awarded to compensate for any expenses incurred by the plaintiff as a direct result of the car accident.
  • Non-economic, or general, damages are awarded to compensate for various forms of pain and suffering claimed by the plaintiff due to the accident.

In cases involving gross negligence on the defendant’s part, a third damage category referred to as “punitive damages” may also be included. Unlike the other two damage categories, these damages are not imposed as compensation to the plaintiff. Instead, the court imposes punitive damages as a form of punishment for the irresponsible behavior of the defendant.

Average Car Accident Settlement Values

Determining an all-encompassing average value for car accident settlements is difficult due to the range of injuries caused in such cases. Depending on the study, national averages range between $10,000 and $45,000 depending on the data pool surveyed. The following is a list of average settlement values based on the damages’ severity:

Settlement Value Severity of Injuries
< $25,000 Minor physical injuries and medical expenses such as whiplash, soft tissue damage, and the like.
$25,000 – $50,000 More extensive injuries with an extended loss period, including broken bones and other injuries that disrupt the plaintiff’s ability to participate in their everyday life fully.
$50,000 – $75,000 Longer-lasting injuries that require prolonged medical attention, including physical therapy, surgery, and other medical bills.
$75,000 – $100,000 Severe yet recoverable injuries such as spinal and brain trauma that don’t result in paralysis or permanent cognitive impairments.
$100,000 – $250,000 Severe injuries requiring significant medical treatment, such as surgery, resulting in permanent cognitive impairment, loss of function, or something similar.
$250,000 – $1,000,000+ Reserved for the most severe cases causing accident victims lifelong paralysis, severely debilitating brain injuries, or wrongful death. Many of these cases exceed one million dollars in value, especially those involving wrongful death.

Is There A Formula For Car Accident Damage Calculations?

Economic experts use multiple methods to determine the final settlement value when calculating the damages of a car accident claim. However, one of the most commonly used methods is called the “multiplier method.” First, the forensic determines the total value of economic damages by adding all the expenses incurred during the loss period. Then, a damage multiplier, usually between 1 and 5, is assigned based on the severity of the plaintiff’s injuries. That multiplier is then applied to the special damage value to determine the total compensation for pain and suffering damages. The formula is as follows:

Total Settlement Value = (Economic Damages) + (Economic Damages x Damage Multiplier)

It’s important to note this is a highly simplified version of the formula. To accurately calculate the settlement value, one must consider several additional factors, including unique elements of the case, contributory negligence, and more. For this reason, working with an economic expert is highly recommended to determine a fair and just settlement value.

Hypothetical Example

In the hypothetical case of Richards vs. Thompson, a car accident occurred on August 14, 2020, while the two parties were driving down Interstate 64 through Louisville, KY. The plaintiff claims they were forced to make an abrupt stop when the car in front of them did the same, at which point the defendant collided with the rear of the defendant’s car at nearly full speed. The accident resulted in both parties suffering extensive injuries. The plaintiff is now claiming damages for past and future medical expenses, pain and suffering, and vehicle damage which the defendant is disputing on the basis that the plaintiff did not have functioning brake lights at the time of the accident.

Factors to Consider In Car Accident Damage Calculations

Car accident damage calculations involve various factors that an expert must consider when determining the value of a settlement. While not a complete list, the following are some major factors considered during calculations:

  1. Special Damages
  2. General Damages
  3. Punitive Damages
  4. Documentation and Evidence
  5. Contributory Negligence
  6. Statute of Limitations

Special Damages

Special damages are a considerable factor that compensates for expenses such as past and future medical bills, property damage, lost wages & loss of earning capacity, and out of pocket expenses.

Example: In our hypothetical case, the plaintiff is claiming damages for their medical bills, totaled car, lost wages, and incidental costs amounting to $45,000.

General Damages

General damages, while more challenging to define, can often hold a significantly higher value than special damages depending on the severity of the injuries and pain and suffering claimed. Non-economic damages compensate for physical pain & disfigurement, mental distress, reduced quality of life, loss of consortium, and more.

Example: In our hypothetical case, the plaintiff’s injuries required a considerable recovery period and medical expenses. Based on their claimed pain and suffering, a damage multiplier of 3.5 has been assigned to calculate their non-economic damages amounting to $157,500.

Punitive Damages

In cases where the court determines the at-fault driver acted with gross negligence, additional damages may be awarded and therefore must be considered when completing damage calculations.

Example: In our hypothetical case, it’s clear the defendant did not intentionally drive into the plaintiff’s car, therefore, the court will not assign punitive damages. However, the defendant’s legal representation does make the point that the plaintiff likely knew their brake lights were not functioning and chose to use the vehicle under such dangerous conditions anyways.

Documentation and Evidence

The outcome of car accident personal injury cases depend heavily on the documentation and evidence provided by each party. With this being the case, both parties must record as much evidence as possible from the moment the accident occurs.

Example: In our hypothetical case, both parties documented the aftermath of the evidence with photographs, a police report, and eyewitness testimony. However, the defendant happened to have a dash camera installed in their vehicle, which clearly shows the plaintiff’s brake lights were not functioning when they came to an abrupt stop.

Additionally, the defendant’s legal team discovered a ticket issued to the plaintiff warning them to cease driving in the vehicle until they fixed their brake lights.

Contributory Negligence

Depending on the state where the accident occurred, contributory negligence will affect the final settlement value to varying degrees. There are three types of negligence laws a state may follow, including pure comparative, modified comparative, or contributory negligence rules.

Example: In our hypothetical case, the state of Kentucky follows pure comparative negligence laws. Therefore,  the jury determines that the plaintiff’s negligent behavior negates their right to claim 70% of the damages and assigns 30% fault to the defendant on the basis that they should have noticed the brake lights of every other vehicle ahead of the plaintiff.

Statute of Limitations

Similar to contributory negligence, each state observes different statutes of limitations limiting the amount of time a plaintiff has to open a legal claim for personal injury or property damage. Compensation is no longer guaranteed if the insurance claim is made outside these limitations.

Example: In our hypothetical case, Kentucky observes a statute of limitations of up to one year for a personal injury claim and two years for a property damage claim. The plaintiff claimed damages within one year of the accident and is within the state’s statute of limitations period.

State Negligence


Statute of Limitations
Personal Injury Property Damage
Alabama Contributory 2 years 2 years
Alaska Pure Comparative 2 years 2 years
Arizona Pure Comparative 2 years 2 years
Arkansas Modified Comparative 3 years 3 years
California Pure Comparative 2 years 3 years
Colorado Modified Comparative 3 years 3 years
Connecticut Modified Comparative 2 years 2 years
Delaware Modified Comparative 2 years 2 years
District of Columbia Contributory 3 years 3 years
Florida Pure Comparative 4 years 4 years
Georgia Modified Comparative 2 years 4 years
Hawaii Modified Comparative 2 years 2 years
Idaho Modified Comparative 2 years 3 years
Illinois Modified Comparative 2 years 5 years
Indiana Modified Comparative 2 years 2 years
Iowa Modified Comparative 2 years 5 years
Kansas Modified Comparative 2 years 2 years
Kentucky Pure Comparative 1 years 2 years
Louisiana Pure Comparative 1 years 1 years
Maine Modified Comparative 6 years 6 years
Maryland Contributory 3 years 3 years
Massachusetts Modified Comparative 3 years 3 years
Michigan Modified Comparative 3 years 3 years
Minnesota Modified Comparative 2 years 6 years
Mississippi Pure Comparative 3 years 3 years
Missouri Pure Comparative 5 years 5 years
Montana Modified Comparative 3 years 2 years
Nebraska Modified Comparative 4 years 4 years
Nevada Modified Comparative 2 years 3 years
New Hampshire Modified Comparative 3 years 3 years
New Jersey Modified Comparative 6 years 6 years
New Mexico Pure Comparative 3 years 4 years
New York Pure Comparative 3 years 3 years
North Carolina Modified Comparative 3 years 3 years
North Dakota Modified Comparative 6 years 6 years
Ohio Modified Comparative 4 years 4 years
Oklahoma Modified Comparative 2 years 2 years
Oregon Modified Comparative 2 years 6 years
Pennsylvania Modified Comparative 2 years 2 years
Rhode Island Pure Comparative 3 years 10 years
South Carolina Modified Comparative 3 years 3 years
South Dakota Pure Comparative 3 years 6 years
Tennessee Modified Comparative 1 years 3 years
Texas Modified Comparative 2 years 2 years
Utah Modified Comparative 4 years 3 years
Vermont Modified Comparative 3 years 3 years
Virginia Contributory 2 years 5 years
Washington Pure Comparative 3 years 3 years
West Virginia Modified Comparative 2 years 2 years
Wisconsin Modified Comparative 3 years 6 years
Wyoming Modified Comparative 4 years 4 years

Statute of Limitations for Car Accident Claims

The statute of limitations for car accident claims refers to the window of time available for the plaintiff to take legal action and claim damages against the defendant after an accident. The statute of limitations for car accident claims in each state ranges between one year and ten years after the accident. Additionally, each state holds two separate periods for the statute of limitations of personal injury and property damage claims.

For example, Washington State maintains a statute of limitations of three years for the plaintiff to make a claim in either category, meaning the plaintiff can legally pursue damages for up to three years after the date of the accident. Once that three-year window has passed, the plaintiff can still attempt to claim damages. However, they are much less likely to succeed, barring exceptional circumstances.

Contributory Negligence Laws Regarding Car Accidents

Another critical element affecting the value of a car accident claim is the state’s negligence laws. These laws consider how the plaintiff’s actions contributed to the accident and factor that contribution into the settlement value paid by the car insurance company. The three basic negligence laws include:

Pure Comparative Negligence

In states that recognize the pure comparative negligence rule, the plaintiff can claim damages based on the defendant’s percentage of fault. For example, if the court assigns 1% fault to the defendant and 99% to the plaintiff, the plaintiff may only recover 1% of the damages.

Modified Comparative Negligence

In modified comparative negligence states, the most commonly recognized negligence law, the plaintiff may claim damages only when their percentage of fault is less than 49-51%, depending on the circumstances. Therefore, a plaintiff assigned 48% of the blame may seek compensation for 48% of the damages incurred. However, if their percentage of fault is 1-3% higher, they may lose their right to recover any damages whatsoever.

Contributory Negligence

Contributory negligence states hold the strictest negligence laws throughout the country. In these states, the plaintiff loses any right to claim damages if they are assigned even 1% fault. These negligence laws are harsh and hold zero tolerance for carelessness on the part of the plaintiff.

Expert Economists Provide More Than Accurate Car Accident Damage Calculations

With so many factors influencing a car accident claim, the services provided by expert economists can be an invaluable asset during litigation. When customers work with The Knowles Group, we provide economic calculations, expert witness testimony, and access to a network of medical and accident reconstruction experts whose testimony can prove vital to your case.

If you’re involved in a personal injury case and require an expert forensic economic witness who can calculate damages, lost income, and provide litigation consulting, have your law firm call us at (206) 860-9477 to schedule a free case evaluation.

Eric Knowles, MBA

The Knowles Group has been providing professional economic services to the legal community since 1979. The firm has worked on behalf of thousands of attorneys in a dozen states and Canada. Testimony has been provided in both federal and state venues.