How Do Insurance Companies Evaluate Personal Injury Claims?
How do you determine the value of a broken arm? What about a spinal injury or chronic pain? When a person is injured, his or her situation is very personal, which makes it difficult to put a dollar amount on what those injuries are worth when making a claim with an insurance company. Claims adjusters decide how to value injuries based on inexact science, and often arrive at numbers that are far less than what injured people feel is reasonable. In situations like these, it helps to know the process that insurance companies go through when determining claim amounts. It’s also often beneficial to speak with a Nashville personal injury lawyer if you have questions or need support.
When Insurance Companies Must Compensate
Fortunately, there are some circumstances which are more cut and dry because there are more concrete values that insurance companies must use when awarding a claim. These include:
- Medical expenses
- Lost wages due to injury and treatment
- Damaged property
Other values are less quantifiable:
- Permanent disability
- Emotional damages which may or may not be clinical, like depression, stress or relationship strain
- Experiential damages, like missed school, social events or training
Although insurance companies must pay for all of the above losses, it can be difficult to place a value on emotional suffering or missed vacation. As a result, insurers use a damages formula to determine a starting value for claims negotiations.
The Damages Formula
The typical damages formula works like this:
- The adjuster adds up all medical expenses related to the injury. These are referred to as “medical special damages” or “specials”
- The adjuster multiplies the specials damages by a number based on the severity of the injury, with minor injuries receiving a multiplier of 1.5 or 2 and more serious or long lasting injuries receiving a multiplier of up to 5 or even up to 10 in very severe cases
- Lost income as a result of the injury is then added to the final value
As you might imagine, errors in judgment can occur when the insurance adjuster decides what multiplier to use for a particular injury. The multiplier used is often less than what the injured person thinks they deserve. In these cases, a personal injury lawyer can help negotiate on behalf of the person who has been injured.
Unfortunately, the damages formula represents only the beginning of claims negotiations. The part of the claims process that most significantly affects the final payout is figuring out the percentage of fault. As with the damages formula, determining the percentage of fault isn’t an exact science, and an injured person is often deemed more at fault in an accident than he or she believes they were.
The value given by the damages formula is reduced by the percentage of fault agreed upon during negotiations, so if an injured person is considered 50 percent at fault by the insurance company, that person’s final payout will be reduced by 50 percent. This is why it’s particularly important to have an advocate on your side during negotiations so that your claim will remain as valuable as possible throughout both the process of determining damages and that of determining fault.
Nashville Personal Injury Lawyer
If you’re in the Nashville, Tennessee area and have been injured, contact a Nashville personal injury lawyer at Mitch Grissim & Associates to help ensure that you receive the insurance benefits you deserve.