Determining the exact amount of money that fairly represents your losses can be tough. There’s no special formula to calculate the perfect amount. Your settlement depends on your unique circumstances. However, there are a few steps you can take to assure your settlement negotiations progress smoothly, and you get fair compensation.
Steps to a successful claim:
- Give the claims adjuster enough evidence proving his insured caused your injuries.
- Get the adjuster to accept liability for his insured.
- Submit documentation of your damages.
- Negotiate in good faith towards a fair settlement amount.
Gathering photographs, witness statements, medical records, and more, you’ll assemble all the supporting documentation you need to begin settlement negotiations. But before negotiations begin, you have to calculate your demand for compensation.
Special and General Damages
Special damages, also referred to as specials, are the measurable amounts of money you lost and will continue to lose due to the at-fault party’s negligence. These include things like medical bills and lost wages.
General damages are the intangible losses you’ve endured and will continue to endure in the future. These are more challenging to calculate, and are often a point of contention. They include things like pain and emotional trauma.
Calculating Special Damages
Calculating special damages is straight forward. You add together the bills and other tangible losses you incurred and will continue to incur due to the accident and your resulting injuries. Special damages include the actual dollar amounts of:
- Past and future lost wages
- Medical bills, including therapy and nursing care
- Out-of-pocket expenses (e.g. medications, crutches, hospital parking fees, etc.)
- Lost or damaged personal items
Calculating General Damages
General damages are more difficult to assess because they’re subjective and personal. This is why a good personal injury calculator program can’t exist. Only humans can be subjective. General damages come under the heading of Pain and Suffering. They can include:
- Emotional distress
- Physical aches and pains
- Anxiety and depression
- Loss of consortium
- Inability to concentrate
- Persistent sleep loss
Your pain and suffering can never be the same as another’s. Two people can sustain exactly the same injury, but one person may experience greater pain than the other. One may develop depression while the other does not. The same type of injury may prevent one person from doing her job, while it has no effect on another’s.
Assigning a value for any type of general damage is entirely personal. Only you can assess the depth of your pain and suffering. When calculating an amount for your general damages, give a lot of thought to how you feel.
Once that demand letter goes out, you can’t take it back. You’re committed to that figure, even if you develop additional symptoms a few weeks or months later.
If you’re not sure about the type and severity of your damages, stop and wait. Each state has a statute of limitations for personal injury lawsuits, usually between one and five years. As long as you’re not close to the limitations date, don’t commit – not until you’re sure about how you feel.
Insurance Companies and Personal Injury Calculators
Insurance companies often calculate injury settlement amounts using computer programs. The most common is called Colossus. The Colossus program uses a point system, which assigns values to special and general damages by analyzing various factors in a claim.
Those values can include whether or not the victim is represented by an attorney, and the success rate of the attorney. Another value is based on average jury verdicts in the area where the injury occurred.
A personal injury calculator like Colossus can’t measure the depth of your pain and suffering. Software programs can’t calculate the negative effects injuries have on your life. They can only generalize compensation amounts based on statistics, and statistics will never be able to measure true human suffering.
Without automated tools to calculate an amount for pain and suffering, victims must rely on the multiple factor, a traditional method for calculating general damages. The multiple factor uses a flexible formula to to come up with an optimal demand amount.
The Adjuster’s Review
The claims adjuster will review your demand very carefully. He’ll closely examine the amounts you’re requesting for compensation. He wants to see how you arrived at those figures and if they’re realistic based on the evidence.
The adjuster will first determine if his insured is actually liable for your injuries. He’ll then verify that each item you’ve listed under special damages is supported by legitimate, documented evidence. For general damages (pain and suffering), the adjuster will compare the amount you’re demanding to what he thinks is appropriate.
His assessment of your pain and suffering will always be different than yours, especially because it’s often based on computer-programmed statistics. You’ll have to convince the adjuster your calculations are realistic and fully supported by the evidence. This is the nitty-gritty of settlement negotiations.
Insurance Calculations vs. Jury Calculations
Insurance company claims adjusters are paid to reach settlements. The last thing an adjuster wants is to fail to settle a personal injury claim. When a claim turns into a trial and a jury is left to deliberate, there’s always a chance the verdict will be thousands of dollars more than the victim asked for in the first place.
In most states, juries are not bound by a maximum compensation limit. They can award a personal injury plaintiff any amount they believe is fair. Not only can a jury’s award be high, but a jury may also charge punitive damages against a defendant.
Punitive damages, like pain and suffering, are intangible. They’re meant to punish a wrongdoer for grossly negligent behavior. If a victim convinces a jury to award punitive damages against the defendant, the victim will receive even more compensation. Punitive damages are often capped by state law, and some states don’t allow them.
When You Need an Attorney
Most personal injury claims result from car accidents and slip and falls. Injuries can also result from defective products, dog attacks, and other negligent acts.
If your injuries are minor, you should be able to negotiate your own claim. If your injuries are more serious, or you’re not sure about the claims process, consult with a personal injury attorney. An attorney can answer your questions and provide valuable information. Most reputable injury attorneys offer a free initial consultation to review your case.