Personal injury claims are usually filed
against the insurance company of the one or ones responsible for
the injury. Assessing the monetary worth of the personal injury
is a critical part of the claim. Since each personal injury is
unique, it is difficult the generalize the worth of the damage
across the population. Individual circumstances play a large role
in the worth of the claim.
Even though each claim is unique, there
are some guidelines that insurance companies go by in order to
assess each claim.
Knowing what the insurance company is
liable for is the first step in settling the claim.
Most liability insurance will pay for:
1. Medical care
2. Expenses related to the medical care
3. Lost income because of the personal injury
4. Physical disability or disfigurement which is permanent
5. Loss of family, educational and social experiences (missed
school, training, vacation)
6. Pain and suffering damages such as stress, embarrassment, anxiety,
depression, post-traumatic stress disorder or marital relations
7. Property damage
When trying to determine the amount of the claim it is usually
easiest to add up the money spent and lost due to medical bills,
rehabilitation, lost time at work and so forth. The pain and suffering
issue, however, is much harder to put a price tag upon.
Insurance claim negotiations have to begin somewhere, so the
adjuster usually adds up all of the medical expenses to come up
with a base figure. Next, the adjust multiplies the amount of
this base figure by 1.5 to 5 depending upon the severity of the
personal injury and the long-term implications for the injury.
In extreme cases, the multiplier can go as high as 10. Last, the
adjuster adds any income lost due to the personal injury. The
sum of these three steps is where claim negotiations begin.
Since most claims have a multiplier that falls between 1.5 and
5, it is important to know how this multiplier is determined since
the monetary differences between a couple of points can be enormous.
The claims adjuster usually takes these points into consideration:
1. How painful was the injury?
2. How invasive and long-lasting will medical treatment be?
3. How obvious is the medical evidence of injury?
4. How long is the recovery period?
5. How serious is the permanent affect of the personal injury?
6. How much treatment was received from a physician or at a hospital
as opposed to physical therapy or other non-physician treatment?
The multiplier goes up in accordance to the severity for each
of the answers to these questions. Another multiplier, or actually
a reverse multiplier to this total amount is the percentage and
extend of each person's fault in the matter. A person may be deemed
50-percent or 80-percent at fault, which will reduce the total
amount by whatever their fault percentage happens to be.
Once the claim negotiations have started, then the insurance
company will also factor in its chances in court if this is where
the claim ends up, the legal fees, and the time and money spent
by the insurance company in preparing for court. So, the most
important thing for the consumer who has been afflicted with a
personal injury is to know the basic guidelines that insurance
companies use in assessing claims and how much room to negotiate
Sometimes court is the last resort, but most times claims can
be settled out-of-court if both parties are working off the same
page. If the insurance company is willing to settle for the amount
owed under their policy, however, one may consider filing a bad
faith insurance claim against the carrier in order to encourage
adequate payment. Consulting a personal
injury lawyer for such cases is advisable.