Most wrongful death lawsuits settle out-of-court. How much they settle for largely depends on these 7 factors:
- the victim’s age and earning potential,
- the victim’s shared fault,
- insurance policy limits,
- the family’s other lost benefits,
- the ages and needs of the victim’s dependents,
- applicable damage caps, and
- effective legal representation.
1. The age and earning potential of the victim
One of the most important types of damages recoverable in a wrongful death lawsuit is for lost income and financial support. The decedent’s loved ones would have benefited from that income, had the accident not occurred. Therefore, they are entitled to recover financial compensation for it.
That lost income is calculated using the victim’s earning potential and their life expectancy. You are generally entitled to recover what they would have earned during the rest of their life expectancy or the rest of your own, whichever is shorter.[1]
The amount that the victim was earning at the time of their death is one factor in this calculation. The other factor is their age and how long they were likely to live, were it not for the fatal accident.
2. Whether the victim was partially responsible
Personal injury laws in each state have shared fault rules. These apply when the injured victim was partly responsible for the accident. They can reduce the amount that can be recovered in a personal injury lawsuit. Sometimes, they can bar recovery completely.
There are 3 types of shared fault rules. All of them require the jury in a personal injury trial to assign a percentage of fault to each party. Even though this happens at trial, it influences the settlement negotiations in wrongful death claims. In those negotiations, lawyers for each side try to predict how the jury would rule.
The 3 types of shared fault rules are:
- contributory negligence, where recovery is completely barred if the deceased victim bore any responsibility for the accident, even if it was just 1 percent,
- pure comparative fault, where your recovery is decreased by the decedent’s percentage of fault, no matter how high it was, and
- modified comparative fault, where your recovery is decreased by the decedent’s percentage of fault, but you are barred from recovering anything if he or she was more than half at-fault.
If your loved one was partially responsible then it can reduce the settlement, sometimes drastically.
3. Insurance policy limits
In many accidents, like car accidents, slip and falls, or product liability incidents, there should be insurance coverage available. However, most liability insurance policies have caps. Once this cap is reached, the insurance company is no longer a source of compensation. You will have to turn to alternatives, such as:
- any other forms of liability coverage that the at-fault party has,
- the liability coverage of other responsible parties,
- your own underinsured coverage, and/or
- holding the at-fault party personally liable and pursuing their assets.
Because fatal injuries are the most severe that can be suffered, wrongful death claims demand substantial sums. It is not uncommon for them to demand more compensation than the insurance policy can provide. If the policy limits are low, it can put pressure on the plaintiff to settle for a lesser amount.
4. The family’s lost benefits
The families of the deceased can also recover compensation for their other lost benefits. This can include things like:
- health insurance coverage from the decedent’s job,
- expected gifts, and
- other forms of non-financial support.
This is similar to the compensation for lost income and financial support. However, it includes less strictly monetary benefits.
Many state laws also allow wrongful death plaintiffs to recover compensation for their loss of consortium or loss of companionship.[2] This is financial compensation meant to cover the deceased person’s loved ones’ loss of:
- love,
- companionship,
- affection,
- society,
- moral support,
- sexual relations for the surviving spouse,
- comfort, and
Large and particularly tightly-knit families are more likely to receive higher settlements than small, looser ones.
However, loved ones are generally not allowed to recover compensation for their grief or emotional distress.[3]
5. Ages and needs of the victim’s dependents
The ages and needs of any of the victim’s dependents is also a factor. Young children tend to suffer more loss of consortium than older ones or young adults.
6. Applicable damage caps
Some states have damage caps on certain types of wrongful death claims. These limit how much compensation you can recover. Even if it is clear that you should get more, these caps legally prevent you from recovering it.
For example, in 2024, California has a $550,000 cap on non-economic damages in wrongful death claims stemming from medical malpractice. This cap will increase by $50,000 every year until it reaches $1,000,000 in 2033.[4]
7. The legal representation of a wrongful death lawyer
An effective wrongful death attorney can also be a factor in the settlement. A good and experienced lawyer in the field is often better able to secure a more favorable settlement.
What is an average wrongful death settlement amount?
Because there is no “average” wrongful death claim, there is also no average settlement. Each case is unique. The 7 factors listed above can lead to extremely different outcomes in what began as very similar cases. As a result, some wrongful death claims settle for only a few thousand dollars. Others settle for well over a million dollars.
How are wrongful death lawsuits paid out?
Wrongful death settlements can be paid out in 2 ways:
- in a lump-sum payment, or
- in a structured settlement.
Which way it is paid out will be a part of the settlement negotiations.
Lump-sum payment
If you choose a lump-sum settlement, the entire amount is paid at once. You or your personal representative may even receive a check for the agreed-upon amount when the settlement agreement is signed.
Getting the settlement payout upfront can help pay down debt from:
- burial expenses and funeral expenses,
- medical bills and other medical expenses, and
- attorneys’ fees from filing the wrongful death action.
If the at-fault party’s insurer is paying the entire settlement, it is more likely to come in a lump sum.
Structured settlements
A structured settlement lets the defendants pay small installments over a period of time. This can provide long-term financial stability. However, nonpayment can become a problem.
Is the settlement taxable?
Wrongful death settlements are usually not taxed. According to the Internal Revenue Service (IRS), these settlements are a form of compensatory damages and therefore not “income.”[5]
However, a wrongful death settlement may be taxed if you previously deducted it from your taxes.
Additionally, part of the settlement may be taxed if it includes non-compensatory damages like punitive damages.
Do different state laws affect the value of a wrongful death case?
Differences in state laws can have a huge impact on a wrongful death settlement. Just a few examples are when states have different laws concerning:
- damage caps, including how high the cap is and whether it even applies,
- shared fault rules,
- the types of damages that can be recovered in a wrongful death claim, and
- which surviving family members can file the wrongful death suit and be beneficiaries in it.
By establishing an attorney-client relationship with a personal injury attorney from a reputable law firm, you can get all the information you need to understand how to proceed with this complex type of personal injury claim.
What is the statute of limitations for a wrongful death claim?
Generally, you will have a couple of years to file a wrongful death claim. For example, the California wrongful death statute of limitations is 2 years.[6]
However, there may be exceptions that delay it or that make it shorter.
Failing to file the civil action in court before the time limit has expired will mean that it can easily be dismissed by the defendants. If you want to take legal action, you need to get the legal advice of a personal injury lawyer sooner rather than later.
Legal References:
[1] See California Civil Jury Instructions (CACI) No. 3921.
[2] See CACI No. 3921 and Florida Statutes 768.21(2).
[3] See Krouse v. Graham, 19 Cal.3d 59 (1977).
[4] Assembly Bill 35 (2022).
[5] 26 USC 104(a)(2).
[6] California Code of Civil Procedure 377.60 CCP.
