How Insurance Companies Determine Personal Injury Settlements

As the victim of a personal injury accident, you have been through enough already. Now that you’re facing the insurance company, trying to receive the compensation you deserve, it could be a whole new battle. How do you know if you are given a fair settlement? How do insurance companies determine settlement amounts? Keep reading to find out. 

The Insurance Adjuster

As employees of the insurance company, the adjusters are striving to get your case settled with as little a financial hit as possible to the insurance company. The goal of insurance adjusters is to protect the company they work for and settle the case outside of court as quickly as possible. Adjusters will take a look at your case and try to find evidence to discredit you. They will collect documents and interview witnesses to determine how much the insurance company should offer you.

Factors Considered

Some of the factors an insurance adjuster will take a look at include:

  • The bills associated with the accident, including for property damage and health problems
  • Lost wages, which includes those past, present, and future
  • Permanent physical disability
  • Emotional or pain and suffering damages

Insurance adjusters take this information to determine how strong a case you have. If your case is very strong, your insurance provider will likely offer you a higher settlement offer in hopes of avoiding court. If you don’t have a very strong case, it’s possible the settlement offer will be lower.

The Settlement Offer

To come up with the settlement offer, there are some easy values and some difficult values to put together. For example, medical expenses would be easy to compute because the adjuster could just collect the bills and add them up. Pain and suffering is difficult to compute because there’s not a monetary value associated with it. Adjusters use two possible standard systems to calculate damages.

  • Pain Multiplier System – The insurance company considers how much pain and suffering has been incurred, and multiplies a number (between 1.5 and 5) with the totals from lost wages and medical bills.
  • Per Diem System – The insurance company multiplies the amount of days suffered by a value they come up with for each day.

It’s possible after computing these amounts, the insurance company will still offer a lower settlement because of the maximum amount of liability the individual has.

Contacting Your Lawyer

A personal injury lawyer, like a personal injury lawyer in Melbourne, FL, can help to ensure you don’t accept a settlement offer that’s too low. If you are suffering after an injury, contact a lawyer to help you understand when to accept, when to ask for more, and when to file a lawsuit.

Thanks to the Law Offices of Arcadier, Biggie, & Wood, PLLC for their insight into how insurance companies determine personal injury settlements.