Insurance and Personal Injury Claims
After being injured in an accident, you’re entitled to receive compensation for loss or damage due to the accident. However, the amount of compensation you receive depends on several factors. The insurance company for the responsible party will often try to offer you as little as possible to settle your claim. Insurance adjusters often offer low amounts in hopes that you will accept the offer without consulting an attorney.
This article explains how insurance companies evaluate personal injury claims.
What Must Insurance Companies Compensate?
An insurance company that represents a person who is found at fault for an accident must pay an injured person for:
- Medical care and related expenses
- Lost income due to the accident
- Permanent physical disability or disfigurement
- Loss of family, social, and educational experiences, including missed school or training, vacation or recreation, or a special event
- Pain and suffering and emotional damages, such as stress, depression, embarrassment, or strains on family relationships
- Damaged property
An example of family strains includes the inability to take care of children, anxiety over an accident’s effects on an unborn child, or the inability to have sexual relations.
How Do Insurance Companies Determine Compensation?
To determine compensation, insurance companies use what they call a damage formula. It’s easy to add up the money spent and money lost, but pain and suffering, missed experiences, or lost opportunities are harder to calculate.
At the beginning of the settlement negotiation process, the insurance adjuster usually adds up the total medical expenses related to the injury. This is the base figure the adjuster uses to figure out what to pay the injured person for pain, suffering, and other nonmonetary losses.
If the injuries are relatively minor, the adjuster might multiply the cost of the medical damages by 1.5 or 2. If the injuries are painful, serious, or long-lasting, the adjuster might multiply the amount of damages by up to 5. It can be as high as 10 in extreme cases.
The adjuster then adds any income lost due to the accident. These figures are usually not used as a final compensation amount, but only as numbers from where the negotiations can begin. Insurance adjusters also consider two other key factors: the insurance policy’s limits and how strong your case is.
The Policy Limits
An insurance company is never going to pay more than the maximum amount a policy allows. For example, if the at-fault driver carries $50,000 in liability insurance, the maximum the insurance company will pay is $50,000. If your damages exceed that amount, then you’ll need to collect the differences from the at-fault driver.
How Strong Is Your Case?
If you have a strong case (such as if a drunk driver struck your car), the insurer will likely offer a large settlement since you will probably win if the case goes to trial. If your case is weaker, then the insurer will offer less money since you may lose at trial and get nothing.
Finding The Right Lawyer For Your personal Injury Case
Hiring a personal injury lawyer should be utilized if you’ve been in an accident. Trying to file a personal injury claim without a lawyer can prevent you from getting the compensation you deserve for your injuries. Now that you know how an insurance company evaluates personal injury claims, you can use this information to your advantage.