A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 26, 2021

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Here's what you need to know...

  • Insurance settlements can vary in their award amounts
  • You need to make sure you are getting enough in the settlement to cover all of your expenses
  • Remember that sometimes injuries can arise later that you are not yet aware of
  • Try to avoid a personal injury lawsuit when possible

What is a car insurance settlement?

A car insurance settlement is a legal settlement agreed upon by both parties in a car insurance dispute. It is often negotiated by the attorneys or representatives of both sides of an accident in a trial.

The final ruling is made by a judge after the parties have shared both sides of their argument and worked out a specific cost that both can live with.

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What is the purpose of car insurance settlements?

Car insurance settlements are meant to satisfy the additional expenses such as medical expenses from injuries one or both parties obtained as a result of the accident. No-fault insurance or personal injury protection insurance (PIP) may pay some of these damages.

But if they do not, the parties may enter into negotiations for a settlement. Once the amount is agreed upon, the judge ruling is final, and it cannot be rescinded.

How do you know you got a fair settlement?

When you are involved in an insurance settlement dispute, it is important to have an understanding of how much is fair before you agree to a settlement. What should you do to figure out if the final amount is going to be enough if you were not at-fault? This decision is final once authorized by a judge, no matter the type of settlement, even if it’s one you don’t agree with.

How do you calculate loss?

One method for determining how much is a fair settlement from your car accident is to take out a calculator and figure out the total amount of loss, expenses, time off work, and other financial loss that you suffered as a result of the accident.

Any sort of property damage that was done, or lost income that you will suffer, should be included in your calculations. There are various types of damages that count as loss; be sure to include them all. In fact, you can find a settlement calculator online if you don’t want to do it all by hand, though they may not get you accurate information.

Most people would have their personal injury attorneys handle the calculations, because they’d be able to offer up much more accurate numbers.

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How can you calculate personal injury amounts?

One thing to keep in mind when you are figuring out how much you could settle for in an insurance settlement is to have a better understanding of personal injury calculations. Personal injuries are the sorts that affect your enjoyment of life, such as whether or not you have any emotional distress that you will need counseling for, and anything that causes you physical pain or requires medical care.

With this type of calculation, it may be better to let personal injury lawyers, or if you have an attorney, give you the numbers, because using a personal injury calculator you find online may not be accurate to your specific situation. They can be good if you’re just looking for a rough idea at least. Using an online calculator for informational purposes could be considered a reasonable approach to what might be a stressful situation, as long as you realize that it won’t be as accurate as a professional.

Remember that a settlement is meant to avoid court. Read up on how personal injury cases are figured first, in case you feel you would be better off to go forward with a court case.

How are personal injury cases figured out in court?

In general, if a case cannot be settled in the insurance settlement process, you could hire a lawyer who is willing to file a personal injury case. If you do that, the decision will be based on the following criteria:

  • Review of the evidence according to the facts of law
  • Pain and suffering factors that are presented to the jury
  • Time out of work and monetary loss
  • Amount of medical expenses incurred from the injury
  • The likelihood that someone will be able to return to work or suffer permanent physical or mental damage

What happens when you are the defendant in a personal injury case?

One important note to add here is that emotional appeal has a great deal of power in a personal injury case as well, and this can add dollar signs to the plaintiff’s award.

If the victim’s attorney shows that the person has lost their job and income, accrued huge amounts of debt and expenses due to the accident, or suffered mental pain and anguish, juries tend to side for a larger payment to the plaintiff. It is important to have adequate insurance to cover damages.

This means emotional pain as well. As mentioned above, if you’re suffering mentally as well as physically, you should be provided compensation for pain in this instance.

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What happens when you’re the plaintiff?

If you are the plaintiff in the case, you and your attorney should review the damages and losses so that the jury gets a clear picture of everything you went through, as well as the physical and more obvious damages that you suffered in the accident. There should be an agreed-upon amount when you both are reviewing everything.

Is settling outside of court an option?

The goal of an insurance settlement is to settle outside of court. It is usually to your advantage to do so. If you move forward with the personal injury case and you lose, you receive nothing. You also have the added expense of the attorney’s legal fees.

It is a big risk. If you can settle outside of court and agree on an amount, you are guaranteed payment soon after that for the amount you agreed upon.

How can you negotiate a fair settlement?

Getting a fair settlement in your car insurance settlement procedure will be determined by a number of factors. Luckily, most of these are within your control.

If you have a good attorney, they can be your voice and fight for your rights to be sure that you get an acceptable settlement based on your unique circumstances to cover your financial loss. Negotiating this amount outside of court is crucial. This is what makes the negotiation process so important; you can end up with the agreed-upon settlement amount.

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What is a great tip to remember?

The other side will typically offer a settlement that is substantially lower than what you asked for, which is a legal tactic to save as much money as possible for the defendant. Remember, the defendant knows the accident is their fault, and they caused the damages.

But they want to keep the amount as low as possible In cases of insurance settlements for car accidents, this is usually to save the insurance company money and thus the defendant, as well with their monthly premiums.

Should you compare car insurance?

Remember that insurance starts at the front end. You need to find the best possible insurance to cover your needs when you are shopping and comparing insurance plans. This preliminary footwork will keep you from having to proceed to the insurance settlement step in the event you are named as a defendant in such a case, or worse, in a personal injury lawsuit.

Be sure to ask a representative to explain the various types of coverage in detail so that you will have a full understanding of your options. And if you need legal advice, seek an attorney’s advice on what would be considered a fair settlement amount if you are the plaintiff in such a case. Remember, drive safely.

Insurance is like an umbrella you keep in your car but hope you never have to use.

Start comparison shopping today to ensure you receive the best coverage at the best rate! Using an online tool can be easy and quick to use. Enter your zip code in our FREE tool to get started.