Determining The Value of A Personal Injury Claim
One of the most critical aspects of a personal injury claim is the calculation of its value –
in other words, what the claim is worth. Although that initial settlement offer in a claim will most likely be insufficient, the following explains how insurers calculate what your claim is worth.
Damages an Insurer must Compensate in a Personal Injury Case
Keep in mind that a person’s injuries can be psychological as well as physical in nature. In personal injury cases, the at-fault party and/or their insurer is liable for the payment of damages. Furthermore, damages are compensatory (monetary) in nature and are intended to make the victim financially whole again. These may include:
• attendant care
• emotional distress
• hospital and medical expenses
• loss of companionship/consortium
• lost income and loss of future earnings potential
• pain and suffering
• permanent disability or disfigurement
• property loss
• rehabilitative or re-training therapy
In most cases, personal injury cases get settled out of court through negotiations. On the other hand, the reluctance of the insurer to meet your demands for compensation could inevitably lead to a lengthy court battle before an agreement can be reached.
Damage Formula vs. Percentage of Fault
In the simplest of terms, compensation for damages is calculated by adding up financial expenses and losses attributed to the victim’s accident and injuries. Since there is no exact way to assign a dollar value to a person’s lost opportunities, missed experiences, or pain and suffering, the insurance companies use what is called a “damage formula” which proceeds in the following manner:
• At the start of negotiations, the adjuster will ad up the total cost of “special” damages or monetary damages (such as lost income, medical expenses, etc.).
• Then they assign a value to what are called “general” damages or non-monetary losses (such as a person’s pain and suffering).
• If the injuries are relatively minor, the adjuster multiplies the monetary damages by 1.5 or 2. If they are more severe (i.e. extremely painful and long-lasting), they will multiply them by 5.
Percentage of fault is another way an insurer calculates the value of a personal injury claim. This is based on the extent to which each party is at fault for the accident or contributes to the cause of it. Although determining fault in a motor vehicle accident is not what you would call an exact science, this will give you a basic idea of how much you and the other party are at fault. It is possible that you cannot do all that math on your own but you can always consult with ICBC lawyers in Richmond that have considerable years in helping people with similar claims.