Learn how insurance companies determine personal injury settlement amounts and what you can do to boost your compensation.
Having a strong claim doesn’t guarantee you’ll walk away with thousands of dollars in settlement money.
When you’re injured by someone else’s negligence, like in a car accident, slip and fall, or medical malpractice, the personal injury settlement will almost always be covered by an insurance policy.
Driven by profit, insurance companies train their claims adjusters to pay as little as possible to injured claimants like you.
Here’s what you need to know to help get the injury compensation you deserve.
Calculating an Injury Settlement Amount
Every injury claim is calculated by adding up the cost of the victim’s damages. Damages are the tangible and intangible losses a person sustains from an injury.
Personal injury damages can include:
- Costs of past, present, and future medical treatment
- Repair or replacement of damaged property
- Lost wages, bonuses, and vacation days
- Physical pain and suffering
- Emotional distress and mental anguish
- Replacement services like childcare and housekeeping
- Burial expenses after fatal injuries
Insurance companies put damages into two main categories:
Special damages, often called “specials,” are measurable hard costs like medical bills, lost wages, and out-of-pocket expenses. Specials are measured with invoices, receipts, and wage statements.
General damages are paid in addition to the victim’s hard costs to compensate for experiences like pain and suffering, mental anguish, and loss of enjoyment. There are no objective measurements for general damages.
The common method used to calculate a personal injury settlement amount is to add up your hard costs, then add one to five times that amount for your pain and suffering.
The tricky part of calculating a fair settlement amount is including the full value of your special damages and justifying your general damages.
Most injury claimants can realistically expect one or two times the amount of their hard costs for pain and suffering.
Severe injuries deserve higher multiples for pain and suffering, but you’ll need the help of an experienced personal injury attorney to get anywhere near the full value of the claim.
Accurately Count Your Hard Costs
Without documentation of medical treatment, you won’t get far with an injury claim.
Medical bills and treatment records show the severity of your injuries and help prove the validity of your pain and suffering claim.
To get the full value of your medical expenses, you must use the full amount of each medical bill, even if the bills were paid by your health insurance. Be sure to request complete medical bills and records.
Easily overlooked medical expenses include:
- X-Rays, CT Scans, and MRI tests usually have a bill from the facility and a separate bill from the doctor who interpreted the results
- Emergency room treatment often results in a bill from the hospital and a separate bill from the emergency room physician
- Ambulance or rescue squad fees
- The cost of crutches, slings, boots and other medical equipment, even if it was covered by insurance
Support Your Pain and Suffering Claims
It’s up to you to convince the adjuster to accept your pain and suffering demand.
Use evidence found in your medical records along with emotionally descriptive language to convey your discomfort and distress.
Describe emotional distress such as:
- Your distress over not being able to lift or hold your baby
- Fear of losing your job while you couldn’t work
- Humiliation from needed help with personal hygiene
- Inability to sleep because of pain
- Sadness over missing holidays and special events with family
Realistic Assessment of Your Case
To recover the highest compensation possible, you must be realistic about your claim and its settlement potential. This doesn’t mean settling your claim for less than it’s worth. It means avoiding the pitfalls of thinking your claim is worth substantially more than it is, or mistakenly undervaluing your claim.
No two injury events are alike. The injuries sustained by one person in a rear-end car accident may be entirely different from those sustained by another person in a similar accident.
Don’t let the adjuster convince you the company settles all similar injury claims for the same amount.
Communicate your unique damages clearly and firmly.
The adjuster won’t give an inch without a fight. The key is being informed enough to stand out from other claimants who don’t understand the connection between injuries, documentation, and total damages.
Factors Affecting Settlement Amounts
The type and severity of your injury will always directly affect the value of your claim. The worse your injuries, the higher the settlement. In theory, that seems obvious. In reality, several factors affect your settlement amount, such as:
- Liability: The burden is on you to prove the at-fault party caused your injuries
- Venue: The adjuster will pay more to settle out of court if you live in an area where juries typically favor the injury victim.
- Shared Blame: In most states, your compensation can be reduced according to your share of blame or denied entirely if you are equally to blame (called the 50% rule) or more to blame (called the 51% rule) than the other party.
- Excessive Medical Billing: Insurance companies are only required to compensate you for reasonable medical expenses. Don’t let an “accident doctor” order repeated tests or questionable treatments or you might be on the hook for the extra cost.
- Interpleaders: When several people are injured in the same accident, and there isn’t enough liability coverage to pay all the bills, the insurance company will file an “interpleader” asking the court to decide how to distribute the available funds.
Soft Tissue Injury Settlements
Soft tissue injuries include injuries to the muscles, tendons, or ligaments. These usually result in pain and discomfort accompanied by swelling and bruising. Soft tissue injuries can also include abrasions and contusions, or more serious herniated or protruding disks.
Pain and suffering from soft tissue injuries can vary from mild discomfort with a twisted ankle to extreme pain from bulging vertebrae. Your injury settlement amount can vary accordingly.
The more medical evidence you have, the higher the settlement will likely be, so long as the evidence is clear and convincing.
Insurance adjusters look at soft tissue injury claims with a critical eye. Because an x-ray or scan can’t easily verify most soft tissue injuries, adjusters tend to be skeptical of extended treatments and high pain and suffering demands.
Adjusters typically challenge injury claims with:
- Low-impact car accidents
- Chiropractic treatments for more than a few weeks
- Long-term physical therapy that consists of massages and heat treatments
- Complaints of pain, suffering or disability that seem out of proportion to the injury
- History of prior similar injuries or pre-existing conditions
You can overcome the insurance adjusters arguments with extremely well-organized paperwork supporting your injury diagnosis and necessity for treatment.
To prove your pain and suffering, you’ll need detailed notes of your accident, the recovery period, and how the injury affected your quality of life.
Attorneys Boost Injury Settlements
When you’ve fully recovered from an accident and liability is clear against the at-fault party, you can probably handle your claim without a lawyer.
Claims from fender-benders, slip and falls, and other minor personal injuries can usually be settled directly with the insurance company for the total of your hard costs plus one or two times that amount for pain and suffering.
To reach an appropriate personal injury settlement amount for “hard” or complex injury cases, you’ll need a skilled attorney to fight for you.
Hard injuries can include internal injuries, broken bones, disfigurement, and more.
Complicated, high dollar claims can involve issues such as:
Punitive damages are a type of compensation awarded by a judge or jury in a courtroom trial, usually against a big company or corporation. They are usually awarded when the at-fault party’s conduct was willful, criminal, or otherwise egregious.
You need a highly skilled attorney to win punitive damages at trial. Although some states have limits on punitive damages, awards can run into hundreds of thousands, sometimes millions of dollars.
Winning a serious injury case can be complicated and expensive. Most injury claims settle out of court, but for specialized cases, choose an attorney who can advance the funds needed to prepare for trial if needed.
Personal injury attorneys usually don’t charge for the initial consultation and will represent clients like you on a contingency fee basis, meaning their fees won’t get paid until they settle your case or win at trial.
There’s too much at stake not to find out what a good attorney can do for you.
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