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Home » Consumer Information » Personal Injury » Injury Insurance Claims

Calculating Personal Injury Insurance Claim Value

The primary concern for an accident victim filing a personal injury claim is undoubtedly how much compensation they will receive to pay for their injuries and other problems. But, this is probably the most difficult aspect of every claim to figure out because each case is unique and its settlement value is based on individual circumstances. Here is an overview of how insurance companies calculate a case's worth.

What compensation covers

To figure out how much money your claim entitles you to, first you must understand what damages are covered by compensation. Typically, the person who is found liable for an accident has liability insurance coverage, and the insurance company pays the victim for:

  • Medical costs.
  • Lost wages due to the inability to work or time spent outside of work in rehabilitation.
  • Long-term disabilities and permanent scarring or disfigurement.
  • Lost social and educational activities.
  • Emotional damages (e.g., stress, embarrassment, depression).
  • Property destruction.

Calculating compensation

A novice would assume that calculating compensation is as simple as adding money spent on bills with money lost from being absent from work. However, when you take pain and suffering and other lost experiences into consideration, there is no way to pin a dollar amount on those. Accounting for such nondescript damages is why a special formula became a necessity.

When claim negotiations commence, an insurance analyst adds up all medical costs relative to the injury. These "medical special damages" serve as the foundation for determining how much to pay the victim for pain, suffering, and other nonfinancial losses referred to as "general damages." When the injuries are not too serious, the analyst multiplies the special damages total by 1.5 or 2. Contrarily, when the injuries are more severe, the special damages figure may be multiplied by as much as 5. In extraordinary cases, they could be multiplied by an amount as great as 10, but the injuries must be lifelong and extremely debilitating. Once the final special damages number has been reached, the analyst adds all lost wages to it. This total is the value at which negotiations begin between the insurance company and the claimant.

Percentage of fault

The degree of blame that falls upon a defendant's shoulders is the most important element in determining the amount of compensation an insurance company will pay out. Deciphering fault after an accident is far from precise, but in the majority of claims, the victim and the insurance representative can deduce whether the defendant is entirely accountable, the victim is to be completely blamed, or the victim is slightly liable. Once this is agreed upon, the verbal assessment is assigned a numeric value as a percentage falling between zero and 100 percent. A percentage is taken from the sum from the previous step, and this becomes the value of the claimant's settlement that the insurance company is willing to pay.

A Florida accident attorney will help you understand the process of how an insurance settlement is calculated so that the insurance adjuster does not try to take advantage of you.