Call Us Now! Toll-free 1-800-776-4529

How Do Insurance Companies Determine Compensation?

Back to articles

Posted On 07.08.15 by in Blog

claims-compensation

If you have been a victim of an accident, and you have a personal injury claim, then one of the things that you and your attorney will need to do is determine how much compensation you need to seek. This will be based on two different types of damages: special and general.

Special damages are tangible things like medical bills and lost wages. General damages are intangible and are often referred to as pain and suffering. You and your attorney will need to determine how much damages to seek. However, the insurance company that you are suing will come up with their own damages too and that will determine what they are willing to offer you.

The Damages Formula

Insurance companies that are liable for your injuries will pay for several things that fit in both special and general damages. They will use a formula to determine how much money they are willing to pay. Here’s the formula that they will use:

• They will add up medical expenses damages.
• The number for medical expenses or special damages will be multiplied by three times for minor injuries.
• The medical expenses damages will be multiplied by up to five times for more severe injuries.
• The number they come to based on the second and third points will be what they allow for general damages.
• Finally, lost income will be added in.

This is the basic formula that insurance adjusters will use, but they will not discuss it during negotiations. That’s because they don’t want you to know that they are trying to keep you from the damages that you actually deserve.

Using Your Own Formula

However, when determining the amount of compensation that you want or need to seek, you can use the formula, but make some changes to it. Here are a couple of things you should keep in mind:

• If you suffer from a more painful injury, seek more in general damages.
• If your medical treatment is invasive or long-lasting, seek more.
• Seek more in damages if your recovery period will be long.
• Any permanent injuries will receive the highest damages.

Essentially, you need to discuss the extent of your injuries with the attorney. They will be able to go over the numbers and get a good idea of what they think they will be able to get from the insurance company. And, it will take some rather drawn out negotiations in some cases, just to come to a final number.

Insurance companies will use a formula to determine how much in damages they will offer you. However, their formula might keep you from the amount of money you deserve in compensation. That’s why your attorney will need to go over all of your injuries with you and then determine what you should seek. Then, the gap between what you think you should receive and what the insurance company offers can be closed through negotiations. Just make sure you find an experienced attorney who knows how to handle personal injury claims of your type.

Related Articles

Interstitial Lung Disease & Your Workers’ Comp Claim

Connecting the Dots Between an Interstitial Lung Disease & Your Workers’ Comp Claim What Is Interstitial Lung Disease? Interstitial lung disease is the name of a group of disorders,...

Read Article

Personal Injury on Maryland Construction Sites

Working a construction job comes with a number of risks. As such, it’s a pretty common environment for personal injury lawsuits to arise. Thanks to all the heavy machinery,...

Read Article
trust trust trust trust