When trying to determine how much they will offer an injury claimant, insurance companies will often resort to a predictable formula. This formula is just a ballpark estimate and relies on many variables, but it can help you predict the upper limits of a possible settlement offer.
Since settlement negotiation for a personal injury claim involves keeping your thought process secret, having insight into what the other side may be using to calculate an offer can be a strategic advantage. So, to improve your insight while negotiating your claim, consider the following information.
What Costs and Damages Go Into a Typical Personal Injury Claim
When considering an insurance or injury claim, the victim has a right to compensation for several categories of costs or “damages.”
- Direct medical care costs as well as related expenses, like medical supplies or travel expenses to appointments
- Lost income and missed time at work
- Physical pain and suffering
- The permanent impacts of the injury, including physical disability and/or disfigurement
- The inability to participate in certain experiences, such as family bonding, social events or educational classes
- Emotional damages stemming from the above losses
The first bullet point is known as “medical special damages” or “specials,” and it is an objective, quantifiable number obtained by adding up the costs of care and related expenses. Lost income, too, can be a readily quantifiable expense.
On the other hand, the remaining four damage types cannot be measured in dollar values. To obtain a general estimate of what they might be, insurers often resort to the following formula.
How the Damages and Compensation Formula Works
When assessing their high-end estimate for a settlement, insurers will look at the concrete special damages and then multiply them by a variable between 1.5 and 5. This variable represents their estimation for the severity of the injury, the intensity of the needed treatment, and the projected recovery period. The amount of lost income is then added to this total.
For example, Michelle had a piece of plaster fall on her head from a building kept in a negligent state of repair. She receives a deep, painful laceration on her forehead that required several stitches and left a disfiguring scar. On the other hand, her recovery is quick, she is able to participate in most activities, and other than the scar there are no measurable permanent effects. Michelle may, therefore, have her total medical costs of $2,500 multiplied by the minimum 1.5 number to equal $3,750 in special and general damages plus her amount of lost income.
On the other hand, if a larger piece of plaster fell on Michelle’s head, causing brain damage and leading to Parkinson’s-like mobility issues after she recovered from a four-day coma, the insurer may multiply the costlier treatment of $125,000 by 4 to equal $500,000 plus lost income.
These are just hypothetical examples, but they illustrate how the severity of the injury and the relative suffering of the victim can affect the total settlement amount offered. Since some of these factors like personal suffering are subjective, requiring evidence and argumentative weight to defend them, a Winston-Salem personal injury attorney can potentially help their client obtain a higher amount of compensation.
If you have been injured and need help representing your injury claim, contact the Lewis & Keller now to receive a free consultation and to potentially start asserting your claim today.