Personal Injury Settlement: How is it Calculated?

When you’ve been injured due to someone else’s negligence, understanding how personal injury settlements are calculated can help you know what to expect and ensure you receive fair compensation. 

The concept of an ‘average personal injury settlement’ can offer a baseline understanding, but it’s important to recognize that actual settlement amounts can vary widely based on the severity of injuries, the type of accident, and the unique circumstances of each case. 

This guide will explain the factors that influence settlement amounts, providing clarity and insight into the process. At Prince, Schmidt, Baca, and Woods, we’re dedicated to helping you navigate this journey with empathy and expertise.

Understanding the Basics of a Personal Injury Settlement

Personal injury settlements aim to compensate victims for the losses they’ve suffered, with the guidance of a personal injury lawyer crucial in navigating the complexities of the process. These losses, known as “damages,” can be both economic (financial) and non-economic (non-financial). Here’s a breakdown of the key components that influence settlement calculations:

Medical expenses are often the most significant component of a personal injury settlement. This includes:

  • Immediate medical costs: Emergency room visits, surgeries, and hospital stays.
  • Ongoing treatment: Physical therapy, follow-up appointments, and medication.
  • Future medical costs: Long-term care and any future surgeries or treatments that might be needed.

Medical expenses are a significant factor in determining the total personal injury settlement amounts, reflecting the financial impact of the injury on the victim’s life.

If your injury has caused you to miss work, you can claim compensation for lost wages. This includes:

  • Current lost wages: The income you’ve lost while recovering.
  • Future lost wages: If your injury affects your ability to work in the future, your future lost wages are also factored in. This is often calculated by considering your age, occupation, and how the injury impacts your earning potential.

The insurance company plays a crucial role in compensating for these lost wages as part of the settlement process, ensuring that you are financially supported during your recovery.

Pain and suffering damages are more subjective and can vary widely. These types of damages aim to compensate you for the physical pain caused by your injury. Factors that influence this amount include:

  • Severity of the injury: More severe injuries typically result in higher compensation.
  • Impact on daily life: How the injury affects your ability to perform daily activities and enjoy life.
  • Duration of recovery: Longer recovery periods can increase pain and suffering damages.

It’s important to recognize that in most personal injury cases, the calculation of pain and suffering damages can differ significantly from one case to another, reflecting the unique circumstances of each incident. 

If your personal property was damaged in the incident (e.g., your car in a car accident), the cost to repair or replace the property is included in your settlement.

Emotional distress is similar to pain and suffering but focuses on the psychological impact of the injury. This can include anxiety, depression, and other mental health issues that result from the accident. Documentation from mental health professionals can support these claims. 

Attorneys specializing in personal injury claims can provide invaluable assistance in claiming compensation for emotional distress, navigating the complexities of fault assignment, settlements, and the critical timelines for filing a lawsuit.

In some cases, the injury can affect your relationship with your spouse or family. Loss of consortium damages aim to compensate for the negative impact on these relationships. Pursuing loss of consortium damages can be an integral part of a personal injury lawsuit, highlighting the multifaceted impact of injuries on an individual’s life beyond the physical harm.

Calculating the Personal Injury Settlement

While the factors above give a general idea of what’s included in a personal injury settlement, the actual calculation involves several steps:

  • Collecting Documentation: Gather all medical records, bills, proof of lost wages, and any other relevant documents. This provides a solid foundation for your claim.
  • Consulting Experts: Sometimes, medical experts, economists, or vocational experts are needed to provide estimates for future costs and losses.
  • Negotiation: Insurance companies may initially offer a lower settlement. Personal injury attorneys, with their expertise in negotiating with insurance companies, will advocate on your behalf to ensure you receive fair compensation.

There are many factors taken into consideration in determining the value of a case. Your personal injury attorney will discuss all these with you fully.

Understanding the process and timing of how personal injury settlements are paid is crucial, as it typically involves negotiations led by your personal injury attorney and can vary in duration from the point of injury to the settlement award.


Understanding how personal injury settlements are calculated can empower you to pursue the compensation you deserve. Every case is unique, and factors like medical expenses, lost wages, pain and suffering, and more all play a role in determining the final amount. 

Most personal injury attorneys specialize in navigating these complex factors, often having established respectful working relationships with insurance company lawyers, which can be crucial in the settlement process. At Prince, Schmidt, Baca, and Woods, we are committed to guiding you through this process with compassion and dedication, ensuring you receive the support and settlement you need to move forward. If you have questions or need assistance, don’t hesitate to reach out to us for a consultation.

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