If you have been injured and have enough evidence to substantiate a personal injury claim, there is a formula that insurance companies use to figure out how much you should be paid during the settlement process. Of course, it doesn’t determine the actual compensation you would receive, as that would not be determined until several other factors have been considered.
Here we will discuss how an insurance adjuster uses the damages and compensation formula, and the other facts they combine it with to arrive at the amount they are willing to pay in your personal injury claim. You can feel more confident negotiating your claim once you are more aware of how the damages and compensation formula works.
The person who is liable for an accident, and by proxy that person’s liability insurer, is responsible for paying an injured person for the following damages: lost income or missed work, medical and related expenses, pain and suffering, permanent disfigurement or disability, loss of experiences, and any related emotional damages.
There isn’t an easy way to put a dollar amount on some of these damages. For example, it’s easy to look at how much you had to pay in medical bills, but it is much harder to account for emotional damages and suffering. Hence, the damages and compensation formula.
The insurance adjuster will begin negotiations on your personal injury claim by adding up the total medical expenses that you incurred as a result of your injury. They will be referred to as “specials,” short for “the medical special damages.” Then, they will begin to calculate how much to compensate you for the other factors—pain and suffering, emotional damages, and personal disability, together known as “general damages.”
In order to arrive at the compensation for these general damages, the insurer will multiple the special damages amount by one and a half to three times for minor injuries, and up to five for injuries that are long-lasting, more serious, or especially painful. Once they arrive at that amount, they will also add on the income you’ve lost (if any) due to your injury. The total of all of these calculations will then become the starting point for settlement negotiations.
An insurance adjuster will generally not tell you how they arrived at the amount they believe your personal injury claim is worth, nor that they are even using a formula. This is a basic negotiating tactic: don’t tell the other party what you are thinking or how you got there. Since they are secretive about formulas, don’t let them know how you are thinking, either. Instead, wait to negotiate the total settlement amount.
Remember, the figure arrived at by multiplying special numbers is only a starting point. After that has been reached, other facts about your injuries and the accident will come into play. Also, the figure will look very different depending on which end of the multiplier spectrum (i.e. the number between one and a half and five) the insurance adjuster applies to your personal injury claim.
The formula multiplier used will be higher in the cases of more painful injuries, harsher necessary medical treatments, more medical evidence available, more serious permanent effects, and longer recovery periods. If you are seeking damages from a personal injury claim in Florida or Illinois, give us a call at Disparti Law Group today.