Understanding Personal Injury Claims & Compensation Valuation
What is the value of my personal injury claim?
There are a lot of factors that go into determining the settlement amount for a personal injury claim. Insurance companies look over several factors related to your case to determine your claim’s value.
Liability & Damages – Who Pays and What Do They Pay for?
The person who is liable for the accident, and therefore their liability insurance company are required to pay the damages for your claim. Many of these damages have traceable expenses like bills and include:
- Medical Expenses
- Income Loss from Missed Work
- Permanent Damage & Disabilities
- Property Damages
Pain & Suffering – Overview
The value of some damages, like pain and suffering or missed experiences/opportunities is calculated differently than the traceable expenses. For these damages, many insurance companies will use one of two methods: the multiplier or the per diem method.
An insurance company that uses the multiplier method to determine the value of personal injury claim takes the traceable expenses and assigns a multiplier number based on the severity of the injury. Historically speaking, this number is usually between 1.5 and 5, and sometimes higher, if the damages are more severe. Some of the factors that determine severity are:
- How obvious the fault of the liable party is.
- Severity of the injuries
- Strong evidence to support the claim of pain and suffering (Verified Documentation)
- How long the recovery period will be.
Per Diem Method
The Per Diem (“By the Day”) method assigns a certain dollar value per day to be paid over a plaintiff’s recovery period, until they reach a point called “Maximum Medical Improvement.” This means you have reached a point where your condition cannot be improved anymore. If a doctor says it is going to take 150 days to reach maximum medical improvement, and the insurance company assigned a Per Diem value of $100, then your pain and suffering damages would be $15,000.
Pain & Suffering – Verification Process
An insurance company needs to verify any claims of pain and suffering. This is typically done by corroboration from medical professionals such as doctors, therapists, & psychiatrists as well as personal accounts from friends and family.
Once an insurance company has calculated all the damages, they will make a settlement. If you are unsure whether the determined value of your personal injury settlement is high enough, you can always talk with an lawyer at the Scranton Law Firm. We provide legal advice for all personal injury cases, and our lawyers are here to fight for you if we believe you are being low-balled.