Understanding Car Accident Settlements

When you settle a car accident claim, you accept a specific amount of money in exchange for releasing the insurance company from further liability. Remember, the money you receive from a settlement is all you will receive after a car crash. Even if your injuries turn out to be worse than you imagined or you run into complications, you cannot return to the insurance company and ask for more.

To ensure that you get the compensation you deserve, you should never sign a settlement without first speaking to a lawyer. Your attorney will look at all the damages you suffered and help you collect the money you need to put your life back together fully.

While settlements can help you avoid lengthy court battles and speed up your compensation, they’re not always the best choice for every car accident victim. Let’s explore the two main paths to compensation after an accident: a settlement or a court verdict.

Settlements vs. Court Verdicts

In short, settlements are reached through negotiations outside of the courtroom and involve attorneys from both sides (and sometimes, a mediator). On the other hand, court verdicts are outcomes determined by a judge or jury after a formal trial process.

Understanding the advantages of each path will help you make informed legal decisions as your case progresses.

Pros of Settling

  • Control: When you settle your case out of court, you retain more control over the outcome. You can decide the terms of the agreement, the compensation amount, and the distribution of responsibility. When you go to court, you lose this control, and a judge or jury will decide how much you receive.
  • Time and Cost: Settlements typically take less time than court proceedings. This allows motor vehicle crash victims to receive compensation sooner than if they were to go through a lengthy trial process. Court cases can be drawn out, involving extensive legal procedures, witness testimonies, and more. Settling can save considerable time and money.
  • Privacy: Settlement negotiations and agreements are private, while court cases are generally matters of public record. Settling out of court prevents the stress and emotional toll of a trial. It can also spare victims from reliving the accident through trial proceedings.

Cons of Settling

  • Settlement Amount: When you settle, you might not get all the money you could have gotten if you went to court.
  • Finality: A settlement is permanent. Even if your injuries suddenly worsen, you cannot renegotiate another deal.

How Insurance Companies Affect Your Car Accident Settlement

Insurance companies play a significant role in car accident settlements. It’s essential to understand that insurance companies are primarily motivated by their shareholders’ financial interests — not yours. Here are several tactics an insurance company might use to persuade you to settle for less than you deserve.

First, insurance adjusters often low-ball you. They hope that you will accept the first offer they give you without contesting it. They’ll then press you for a quick settlement, especially if they suspect that you are unaware of the full extent of your injuries and damages. This can cause car accident victims to settle for less than they should.

Insurance companies might also attempt to deny certain aspects of a claim, such as medical treatment or property damage, to reduce their payout. They might attempt to shift blame to you or another party to reduce their liability.

Experienced car accident attorneys like those at Rainwater, Holt & Sexton won’t let this happen. We understand the tactics employed by insurance companies, and we’ll negotiate on your behalf, ensuring that you receive a fair settlement that truly reflects the extent of your damages and losses.

Factors Influencing Settlement Amounts

You and your attorney must consider the accident’s intricacies, the extent of damages, and the overall impact on your life before determining how much compensation to seek. These are the factors you should consider.

The type, extent, and long-term implications of your injuries can significantly increase the value of a claim. Severe injuries that require extensive medical treatment, surgeries, and rehabilitation may result in permanent disability. Additional compensation can help you navigate these challenges in the future.

Physical pain, emotional distress, and reduced quality of life associated with severe injuries are factors that are considered during settlement negotiations.

If one party is found to be entirely at fault, they may be responsible for covering all of the damages, potentially resulting in a higher settlement for the non-at-fault party. If both parties share the blame, the settlement amounts will be adjusted accordingly.

Arkansas and Tennessee follow the doctrine of modified comparative fault, which means that you can pursue compensation if you are 49% or less at fault for the accident. However, the amount of compensation you receive will be reduced by your percentage of fault. Let’s illustrate this with an example.

Suppose another driver ran a red light and crashed into the side of your car. You are awarded $100,000 in compensation for your injuries, but the courts determine that you were 20% responsible for the accident because you were speeding at the time of the crash. In this case, you would only collect $80,000 of that award.

Insurance companies know these doctrines well, and they’ll work hard to place as much of the blame on you as they can. Your car accident lawyer will push back and build a solid case showing who is really to blame for your accident and injuries.

The financial repercussions of the accident, including medical expenses and lost wages, directly impact settlement negotiations. Medical bills, including hospitalization, surgeries, therapy, and ongoing treatments, can quickly accumulate and increase the overall settlement figure. Income lost due to missed work days can also factor into the compensation amount.

While physical injuries are more tangible, emotional and psychological effects can be just as debilitating, and they are often considered during settlement discussions. Pain and suffering, emotional distress, anxiety, and trauma from the accident can greatly affect your overall well-being. These non-physical damages are considered when evaluating the accident’s comprehensive impact on your life.

Well-documented evidence, such as police reports, medical records, eyewitness testimonies, and accident scene photographs, can strengthen your case. In the hands of a skilled negotiator, evidence like this can significantly increase your compensation. Your attorney will advocate for you and your family, present evidence persuasively, and navigate the complexities of negotiations to secure a more favorable settlement.

Common Types of Injuries and Their Impact on Car Accident Settlements

If you suffered a major physical injury in an accident, you know that the damage extends far beyond physical pain. Before you agree to a settlement, you should consider all of the damages — medical bills, need for ongoing treatment, even changes to your daily routine — that will determine the settlement amount you should pursue.

Soft tissue injuries, such as strains, sprains, and whiplash, are common results of car accidents. While these injuries may not always be immediately apparent, they can lead to significant discomfort and limitations in daily life. Chronic back pain or neck pain can also cause reduced mobility and long-term disability.

Broken bones often require surgeries, prolonged medical treatments, and rehabilitation. Severe fractures may never heal correctly, leading to a lifetime of pain and reduced mobility.

TBIs range from mild concussions to severe brain damage, and their impact on settlements varies accordingly. Severe TBIs can lead to substantial medical bills, ongoing cognitive impairments, and the need for lifelong care.

Injuries to the spinal cord can result in paralysis or significant loss of mobility. Settlements for these injuries are often substantial due to the lifelong medical costs of paralysis and the psychological impact on victims and their families.

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Mental Stress and Psychological Injuries

Any settlement you receive should also account for the psychological toll of your injuries and their impact on your personal life and future aspirations.

  •  Post-Traumatic Stress Disorder (PTSD). Car accidents can trigger PTSD, a debilitating psychological condition that affects the victim’s mental well-being. Settlements for PTSD often factor in the cost of therapy, counseling, and the impact of ongoing emotional distress on the victim’s life.
  • Anxiety and Depression. Anxiety and depression are common psychological consequences of car accidents. These conditions can hinder the victim’s ability to resume normal life and work. Settlements for anxiety and depression depend on the cost of mental health treatments and therapies and compensation for the victim’s diminished quality of life.

Economic vs. Non-Economic Damages

To ensure you receive the compensation you deserve, your attorney will consider the impact of both economic and non-economic damages.

Economic Damages: Tangible Costs

Think of economic damages as the money you can count and see — it covers real, measurable expenses due to an accident. You can put a number on these costs and easily show them to someone.

Examples of economic damages include:

  • Medical bills
  • Hospital stays
  • Doctor’s appointments
  • Surgeries or treatments
  • Rehabilitation and physical therapy expenses
  • Lost wages, earnings, and benefits
  • Property damage
  • Transportation expenses
  • Home care costs (if you need help at home because of the accident)
  • Any other direct financial losses caused by the accident

Non-Economic Damages: Emotional Costs

Non-economic damages are more difficult to understand because they address the intangible effects of an accident, like pain and emotional distress. Since these things can’t be measured in dollars and cents, they’re more difficult to prove to an insurance company.

Examples of non-economic damages include:

  • Pain and suffering
  • Emotional distress
  • Anxiety
  • Depression
  • Loss of enjoyment of life
  • Loss of companionship or consortium (if the accident affects relationships)
  • Mental anguish
  • Physical and emotional trauma

An experienced car accident attorney will help you paint a picture of all of your damages — economic and non-economic — to help maximize your recovery.

What Should I Expect from the Settlement Process?

Navigating the aftermath of a car accident involves several stages that ultimately lead to a settlement agreement. This process requires careful documentation and skilled communication with insurance companies.

Initial Engagement with Insurance

After the accident, the first step typically involves reporting the incident to your insurance company and initiating the claims process. You’ll need to provide details about the accident, such as where and when it happened, the parties involved, and any relevant police reports. The insurance company will then assess the damages, review medical records, and estimate the potential costs. This stage sets the groundwork for further negotiations.

The Decision: Do I Settle or Go To Court?

Once the insurance company evaluates the damages, you’ll face a crucial decision: settling or going to court. This decision hinges on various factors:

  • Potential Compensation Amount: Consider the estimated settlement offer from the insurance company. Does it adequately cover your economic and non-economic damages? Legal representation can help you understand what a fair compensation amount might be.
  • Time Frames: Settling is generally faster than going to court. If you need immediate financial relief, settling might be the better option.
  • Predictability of Outcomes: While settlements allow for more control over the outcome, court cases introduce an element of uncertainty. A judge or jury will make the final decision in court, which can result in larger or smaller awards than you might expect.

Thankfully, you do not have to make this decision alone. Your car accident attorney will provide insight into your rights, help you gauge the fairness of a settlement offer, and assist in negotiations.

How Do I Maximize My Car Accident Settlement?

You can maximize your settlement by focusing on key steps like gathering comprehensive evidence and seeking experienced legal assistance.

The Role of Evidence

Clear evidence can help establish who was at fault in the accident and demonstrate the extent of the damages you suffered. With the right evidence, you and your lawyer can gain the upper hand in negotiations and strengthen your case.

You can help your case by gathering and preserving as much evidence as possible. After a car accident, you should take photos of the scene, your injuries, and any property damage. Obtain a copy of the police report, gather witness statements, and keep track of all medical records and expenses.

It is also important to write down everything you remember about the crash while the details are fresh. Include information about weather conditions, road conditions, traffic signals, and other relevant factors. This detailed account can strengthen your case when dealing with insurance companies or legal proceedings

Why Expertise Matters

Experienced car accident attorneys can guide you through the complex settlement process, ensuring your rights are protected and you receive fair compensation. Your lawyer will advocate on your behalf, presenting evidence persuasively and countering tactics insurance adjusters use to reduce settlement offers.

If the insurance company refuses to settle your case fairly, your attorney will take your case to court. When this happens, you can rest easier knowing you have a team of experienced litigators on your side. Their familiarity with legal procedures and the courtroom environment can be invaluable in winning your case.

FAQs: Car Accident Settlements

Question: What is the typical timeline for a car accident settlement?

Answer: It takes time to settle a car accident claim. Easier cases can take several months to settle, and more complex injury accidents may take a year or more to settle. Your attorney may wish to understand the full extent of your injuries before negotiating any settlement package.

Question: How is the settlement amount determined?

Answer: The settlement amount is determined by considering the severity of injuries, medical expenses, lost wages, property damage, emotional distress, and even shared fault. Insurance adjusters and legal experts evaluate these factors to arrive at a compensation amount that reflects the accident’s full impact on the victim’s life.

Question: Can I negotiate the settlement myself, or do I need an attorney?

Answer: While you can negotiate a settlement on your own, it’s advisable to seek an attorney’s expertise. Experienced attorneys understand insurance companies’ negotiation tactics and can help ensure you receive a fair and just settlement. Attempting to negotiate alone might lead to lower compensation or misunderstandings about your rights.

Question: What if I’m partially at fault for the accident?

Answer: Being partially at fault does not necessarily eliminate your right to compensation. The settlement amount might be adjusted based on the degree of fault. For example, if you are 20% at fault, your compensation might be reduced by that percentage. An experienced car accident attorney can help navigate the complexities of partial fault scenarios and work to secure the best possible outcome.

Real-World Settlement Examples

$1.2 MIL

Head injury | Broken Bone Auto accident


Brain & back injury Auto accident

$4.5 mil

wrongful death Auto accident


Head & hearing loss injury Auto accident

Maximize Your Recovery With Rainwater

If your world has been turned upside down by a car accident, we’re here for you. Our experienced team will advocate for you and help you secure the compensation and justice you deserve. Plus, our No Fee Guarantee™ means you pay us nothing unless we win your case.

Time and again, we’ve achieved substantial settlements for our clients in Arkansas, Tennessee, and nationwide. Our mission is to do the same for you. Reach out to Rainwater, Holt & Sexton today and tell us your story.

This is our home, and we want to ensure our neighbors and friends are supported.  With nine offices in Arkansas and Tennessee – Little Rock, Little Rock-Corporate Hill, Springdale, Conway, Hot Springs, Bryant, Jacksonville, Jonesboro, and Memphis — our car accident lawyers are easily accessible when you need help.

We’re here to help.

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