How Are Personal Injury Claims Valued By Insurers?
Personal injury claims are typically filed on the grounds of receiving a monetary value that is comparable to the injuries and damages suffered by the victim. However, relying on liability insurance companies to fairly match the right dollar amount to the losses can be the most controversial and challenging aspects of the personal injury claims process. The liable party is responsible for compensating the victim, but liability insurance companies often have different methods of valuing personal injury claims.
Losses That Require Mandatory Compensation
Different types of compensatory damages generally fall under two categories: “special damages” - medical costs, permanent physical disability compensation, damaged property - and more speculative “general damages” - lost earning capacity or emotional damages.
The formula used to account for the damages listed above can differ from one insurance company to another, but the formula will generally add up all the special damages before considering general damages and then multiplying the damages by an agreed upon number that properly accounts for the severity of the injury.
With severity comes higher compensation damage rewards, but determining the severity does not come so easily for either side. “Hard” injuries, like broken bones, are often more serious than “soft” injuries, like soft tissue damage, although “soft” injuries generally take a longer time to heal, which could lead to a longer time without being able to return to work.
A damages formula also considers facts about the victim’s background. Often times, children and senior citizens receive more compensation because they are considered less independent and able. On the other hand, teenage and middle-age victims may be valued more if their injuries completely alter their lifestyle and abilities. Even wealthy victims can receive high compensation rates if they suffered a severe decrease in earning capacity due to the injury.
Percentage of Fault
Once the damage formula is solved, that number is the one that begins the conversation of the final amount received by the victim. It is not an be-all and end-all decision, but instead considered negotiable. The next step is to assess the percentage of fault of the victim in the personal injury claim. If the injuries were caused in a bad car accident and the injured driver is found to be 25% at fault for the accident, then the victim would only receive 75% of the allocated damages calculated by the insurance company’s formula.
If you are interested in filing a personal injury claim but are not sure how to approach the situation, contact Colley & Colley law firm in Tyler, Texas for a free consultation. Our experienced lawyers will help you understand your options and what sort of damages you may receive.