Figuring out how much your accident injuries are worth is a critical aspect of any personal injury claim, and it’s the part of a claim that is most difficult to determine; the amount varies depending on your very particular circumstances. Here is an overview of how insurance companies determine the value of a claim.
To determine what your claim is worth, you must first know the types of damages for which you may be compensated. Usually, a person who is liable for an accident — and therefore his or her liability insurance company — must pay an injured person for:
medical care and related expenses
income lost because of the accident, because of time spent unable to work or undergoing treatment for injuries
permanent physical disability or disfigurement
loss of family, social, and educational experiences, including missed school or training, vacation or recreation, or a special event
emotional damages, such as stress, embarrassment, depression, or strains on family relationships — for example, the inability to take care of children, anxiety over the effects of an accident on an unborn child, or interference with marital intimacy, and
The Insurance Company’s Damages Formula:
When determining compensation, it is usually simple to add up the money spent and money lost, but there is no precise way to put a dollar figure on pain and suffering or on missed experiences and lost opportunities. That’s where an insurance company’s damages formula comes in. Many – if not all carriers –
At the beginning of claim negotiations, an insurance adjuster adds up the total medical expenses related to the injury. These expenses are referred to as “medical special damages” or simply “specials.” That’s the base figure the adjuster uses to figure out how much to pay the injured person for pain, suffering, and other nonmonetary losses, which are called “general” damages.
When the injuries are relatively minor, the adjuster multiplies the amount of special damages by 1.5 or 2. When the injuries are particularly painful, serious, or long-lasting, the adjuster multiplies the amount of special damages by up to 5. (The multiplier may be as great as 10 in extreme cases).
The adjuster then adds on any income lost as a result of the injuries.
That’s all there is to the formula. However, this figure — medical specials multiplied by a number between 1.5 and 5, then added to lost income — is not a final compensation amount but only the number from which negotiations begin.
Percentage of Fault
The extent each person is at fault is the most important factor affecting how much the insurance company is likely to pay. The damages formula gives you a range of how much your injuries might be worth, but only after you figure in the question of fault do you know the actual compensation value of your claim — that is, how much an insurance company will pay you.
Determining fault for an accident is not an exact science, but in most claims both you and the insurance adjuster will at least have a good idea whether the insured person was entirely at fault, or if you were a little at fault, or if you were a lot at fault. Whatever that rough percentage of your comparative fault might be — 10%, 50%, 75% — is the amount by which the damages formula total will be reduced to arrive at a final figure.
Here is an idea of what you can expect during your first meeting with an injury attorney:
The lawyer may ask you to sign a form authorizing the release of your medical information from health care providers, so that he or she can obtain your medical records on your behalf
The lawyer will want to know about all of your insurance coverage. This will include health insurance, and if you are receiving Medicare or Medicaid benefits.
The lawyer will ask if you have talked to any insurance adjusters and if so, what you have said and whether you provided a recorded or written statement about the accident or injury.
The lawyer will ask if anyone else has interviewed you about the accident or your injuries, and if so, with whom you spoke and the details of what was discussed.
Even if it is evident by looking at you, the lawyer may ask about the current status of your injuries — whether you are in pain, what your prognosis is, etc.
The lawyer may advise you to see your doctor if you have any lingering physical problems or complaints. If you don’t see your doctor and later decide to pursue a legal claim for your injuries, the defendant may argue that you aren’t seriously hurt, on the theory that no doctor visit indicates no medical problems.
The lawyer may decide to consider your case, and to contact you shortly after the meeting to discuss your legal options. This is a common practice in injury cases, so you should not read anything into it.
The lawyer may decline to take your case. He or she may do this for many reasons, such as his or her current caseload, capabilities or specialties, economic situation, or family responsibilities. You also may learn that in the lawyer’s opinion, you do not have much of a case. While this is valuable information, and it is better to get such an opinion early, you should by all means seek a second opinion from another attorney.
The injury attorney may refer you to another lawyer. This happens when the lawyer cannot take your case for any number of reasons, or when he or she thinks that the other lawyer can do a better job under the circumstances.
The lawyer may ask you to sign a retainer contract or other form of agreement for representation. Read the contract carefully and ask questions before you sign it. You should be able to take the contract home to study it before signing.
The lawyer will tell you what the next steps are. There may be a factual investigation before a lawsuit is filed or settlement is considered, and the lawyer may be able to give you a rough estimate of how long it will take to resolve the case.
The lawyer will tell you not to talk about the case with others, and that you should refer questions back to him or her. This is very important advice. Just as loose lips sink ships, stray comments can ruin your case in the courtroom.
The lawyer will probably give you an idea of how he or she intends to keep you informed of progress in your case. There is no unified approach to this. Some lawyers provide periodic report letters; others call you on a periodic basis or when something happens; still others will ask you to call when you have questions.