If you’ve been in a car accident in Montana, you’ve probably had this thought: How do insurance companies calculate car accident settlements? It can feel arbitrary, impersonal, and insulting, especially when you’re the one dealing with pain, missed work, and a wrecked vehicle.
However, insurance companies do follow a process, but it is designed to protect their bottom line. When you know how settlements are calculated in Montana, that can help you understand why offers often start lower than expected.
Calculating Economic Damages
Every car accident settlement starts with economic damages. These are losses with clear dollar amounts. Medical expenses are front and center. Insurance adjusters look at:
- Emergency room visits
- Hospital stays
- Imaging
- Surgeries
- Physical therapy
- Medications
- Follow-up care
In Montana, they consider whether future medical treatment is likely, especially for injuries that do not resolve quickly.
However, insurers don’t add up the total of the bills and send a check. They see whether the treatment was reasonable and necessary. If they think care went on too long or was not directly related to the crash, they may discount it.
After that, they look at lost income. If your injuries kept you off the job, insurers calculate lost wages using pay stubs, tax records, or employer statements. If the accident affects your ability to work long-term, they may look at loss of earning capacity. Keep in mind that this becomes a point of contention unless the evidence is strong in your favor.
Property damage rounds out this category. This includes:
- Vehicle repairs or replacement
- Towing
- Rental cars
- Personal items damaged in the crash
Once these numbers are added up, the insurance company has its starting point. But this is just the foundation, not the full value of the claim.
Pain, Suffering, and the Losses
Non-economic damages cover pain and suffering, emotional distress, inconvenience, and loss of enjoyment of life. Since no receipts for these losses are available, insurers use formulas.
Many use the multiplier method. This is where the economic damages are multiplied by a number between 1.5 and 5. For example, a soft tissue injury with a quick recovery might get a low multiplier. More serious injuries, chronic pain, or permanent limitations are assigned higher numbers.
Some insurers use a per diem approach. They assign a daily dollar amount to your pain and multiply it by the number of days symptoms last. Many times, insurance companies lowball both the daily rate and the duration.
These calculations are subjective. In these cases, insurers almost always choose the method that leads to the lowest payout.
Fault Matters Under Montana Law
Montana follows a modified comparative negligence rule. That means your settlement can be reduced by your percentage of fault. If you are found to be 50% or less at fault, you can still recover damages, but at reduced compensation. If you’re 51% or more at fault, you recover nothing.
Insurance companies know this fact. And they will use it strategically. Even a small argument that you were partially responsible, such as speeding slightly, not reacting quickly enough, can reduce a settlement.
What About Policy Limits?
No matter the seriousness of your injuries, insurance companies will not pay more than the available policy limits.
In Montana, the minimum auto insurance limits are:
- $25,000 for bodily injury per person
- $50,000 per accident
- $20,000 for property damage
If the at-fault driver only carries minimum coverage, that can cap the settlement, even when damages exceed those limits. This is where underinsured or uninsured motorist coverage can make a huge difference.
Montana Car Accident Settlements Vary
In the state of Montana, two similar accidents can result in very different settlements depending on several factors
At the end of the day, insurance companies calculate settlements with the goal of resolving the claim for as little as they reasonably can. When you know how they do it, that puts you in a better position to recognize when an offer reflects reality and when it doesn’t.
After a car crash, you want to fight for the maximum compensation for your claim. At AFJ Law Firm PLLC, we are ready to work for you.
At AFJ Law Firm PLLC – Personal Injury, Car Accident, and Insurance Law., we are here to help you through the entire claims process, including proving fault in these accidents. Click here to visit our Montana Personal Injury Frequently Asked Questions page. Click here to visit our Commercial Trucking and Semi-Truck Accident practice area page. Contact us if you still have questions about your Montana trucking accident case.