Don’t rely on the adjuster’s personal injury calculator for fair compensation. Here’s how to figure out what your injury claim is really worth.
Determining the exact amount of money that fairly represents your losses can be tough. There’s no special formula to calculate the perfect amount.
Every injury claim is different. Your settlement depends on the unique circumstances leading to your injury. It’s important to know about valuing your medical costs, lost wages, and emotional distress.
Here’s where we unpack what you need to know about hard costs, pain and suffering, and factors the insurance company will try to use against you.
What is My Injury Claim Worth?
No matter how you were injured, you will have some kind of losses. Insurance companies use the term “damages” to describe losses.
In insurance lingo, there are two categories of damages:
- Special damages, also called economic damages, are the measurable amounts of money you lost and will continue to lose due to the at-fault party’s negligence. “Specials” include things like medical bills and lost wages.
- General damages, also called non-economic damages, are the intangible losses you’ve endured and will continue to endure in the future. General damages include pain and emotional trauma.
Calculating Special Damages
You will calculate special damages by adding together your hard costs resulting from the injury.
Special damages include the actual dollar amounts of:
- Past and future lost wages
- Medical bills, including therapy and nursing care
- Out-of-pocket expenses, such as medications, crutches, and transportation fees for medical appointments
- Replacement costs, such as childcare, housekeeping, and yard work while you were incapacitated
- Lost or damaged personal items
The total of your special damages is the foundation of personal injury value calculations. Without medical bills, you won’t get far with an injury claim.
Be sure to include the full amount of every medical bill, even if your healthcare plan covered some or all the cost at the time you were treated.
Some types of medical services will involve more than one bill, for example:
- Imaging tests like X-Rays, MRI and CT Scans usually have a bill from the facility for use of the machine and a separate bill from the doctor who interpreted the test results
- Emergency departments send a bill from the hospital and a separate bill from the emergency room physician who treated you
Calculating General Damages
General damages are more difficult to assess because there is no objective measurement for your suffering. Each personal injury case is different.
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 working while it does not affect someone else.
General damages come under the heading of “pain and suffering,” and may include:
- Emotional distress
- Physical aches and pains
- Anxiety and depression
- Loss of consortium
- Inability to concentrate
- Persistent sleep loss
Multiply the total of your special damages by one or two to get a fair estimate of your pain and suffering value. Most insurance companies will accept a multiple of one or two times your specials for mild to moderate injury claims.
For severe injuries, you’ll need a personal injury attorney to get the insurance company to pay a fair amount for your pain and suffering.
High-dollar personal injury calculations take into account:
- Extreme mental anguish: The more intense the mental anguish you’ve suffered, the higher the compensation. This will be easier to prove if you require the care of a mental health professional because of your injuries.
- Persistent pain or permanent injuries: Long-term pain from invasive treatments or complex wounds, or permanent physical injuries like scarring, amputations, or paralysis, can support higher values for general damages.
- Shocking events: Injuries caused by shocking events like shootings, plane crashes, or being trapped in a burning vehicle can justify higher general damages calculations.
Assigning a value for any type of general damage is entirely personal. Only you can assess the depth of your pain and suffering. The challenge is to convince the insurance company to pay. When calculating an amount for your general damages, try thinking like an adjuster to increase your compensation.
Putting it All Together: Your Demand for Compensation
Before you see a dime in compensation, the burden will be on you or your attorney to convince the insurance company that:
- Their insured owed you a duty of care, meaning they had an obligation to avoid causing harm
- Their insured was negligent by doing something wrong or failing to act responsibly
- Their insured’s negligence was the direct cause of your injuries
- Their insured is liable, meaning responsible for your damages
By gathering photographs, witness statements, medical records, and other evidence to prove your claim, you’ll assemble all the supporting documentation you need to begin settlement negotiations.
If you’ve decided to handle your own claim negotiations, you’ll begin by preparing your written demand for compensation.
Your demand for compensation is the total amount you believe is a fair payment for your injury claim, sent with copies of your medical bills and other supporting evidence.
Estimate your claim value by adding together your calculations for Special Damages and General Damages. Use the total as the amount of your compensation demand.
Look like a pro by using our sample Personal Injury Demand Letter.
Insurance Companies and Personal Injury Calculators
Very rarely will the insurance adjuster agree to pay your initial demand for compensation.
The claims adjuster will carefully review your demand to see how you arrived at those figures and if the evidence matches your claim.
The adjuster will determine if their insured is fully to blame for your injuries, then will double-check to see if you have legitimate evidence of your special damages.
For general damages like pain and suffering, the adjuster will compare the amount you’re demanding to what they think is appropriate.
The adjuster’s assessment of your pain and suffering will always be different from yours. Convincing the adjuster your calculations are realistic and fully supported by the evidence is the nitty-gritty of settlement negotiations.
Many insurance companies try to save money on injury claim payouts by using computerized personal injury calculators. One of the most common settlement calculators is Colossus.
The Colossus program is designed specifically for insurance companies. It assigns values to special damages and other factors in a personal injury claim. There are hundreds of factors used by Colossus, like whether the victim is represented by an attorney and average settlement amounts for similar injuries in the area.
Injury attorneys have hotly contested the use of computerized personal injury calculators. There are too many variables that can unfairly reduce a claimant’s injury compensation, like a mistake made by the person who enters data about your claim.
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.
Allstate Pays $10 Million to Insurance Regulators
In 2009, insurance commissioners from multiple states launched an investigation into Allstate Insurance Company’s use of the Colossus computer program to put a value on personal injury car accident claims.
The investigation looked at how Allstate used Colossus to value personal injury claims, including how:
- Colossus is programmed
- Adjusters are trained to use the program
- Adjusters input information about claims
- Colossus is “tuned” or updated to reflect current claim settlement values
Lead investigators did not identify company-wide issues involving underpayment of injury claims. However, they found the need for more oversight and better training for adjusters using Colossus.
In addition to paying regulators a total of $10 million, Allstate agreed to follow suggested recommendations for their claim management process, including notifying claimants when Colossus is used to calculate their claim’s value.
Factors That Affect Injury Calculations
For cases like malpractice, birth injuries, product liability, and other injury types that involve complex litigation against corporate defendants, you’ll need an experienced personal injury attorney.
Most personal injury claims result from car accidents and slip and falls. Injuries can also result from dog attacks and other negligent acts. For most of us, that means dealing with an insurance company to pursue compensation for injury claims.
Several factors can dramatically effect calculations for personal injury settlements from an insurance company:
- Policy Limits: When your injury claim value is much higher than the available insurance limits, your only recourse is to file a lawsuit against the at-fault person for the difference.
- Shared Blame: The adjuster will try to shift some of the blame on you for the circumstances of your injuries. In a few states, that’s a reason to deny your claim. In most states, your claim can be denied if you are equally to blame (50% rule) or more to blame (51% rule) than the insured.
- Disproportionate Medical Bills: Insurance companies only pay for reasonable and necessary medical expenses. If an “injury doctor” pumps up the billing with excessive tests and treatments, the adjuster can take those costs out of the calculation.
- Location: Also called “venue,” the adjuster will pay more to settle a claim out-of-court in areas where juries tend to favor injury victims over insurance companies.
Attorneys Increase Injury Compensation
Minor, uncomplicated injury claims can usually be handled directly with the insurance company.
Insurance company claims adjusters are paid to reach settlements. The last thing an adjuster wants is for you to hire an attorney and file a lawsuit.
When a claim turns into a trial, and a jury calculates your injury compensation, there’s always a chance the verdict will be thousands of dollars more than the original settlement demand.
On the other hand, you can never tell what a jury will decide. That’s why a good personal injury attorney often negotiates a fair settlement with the insurance company before the case ends up in court.
Insurance companies are notorious for offering lower settlements to claimants who aren’t represented by an attorney. They know when they make their “final offer” you probably won’t have the energy or legal skill to fight for more money.
Don’t settle for less. Most reputable injury attorneys offer a free initial consultation to review your case. There’s no cost to find out what a good attorney can do for you.
Video: Calculating Personal Injury Compensation
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