In my experience as an injury lawyer, here’s how insurance companies determine the value of your personal injury claim.
It’s the question that almost every client asks: “So, how much is my claim worth?” And, usually the answer is simply, “It depends,” or “It’s too early to know the value of your claim yet.”
The problem that attorneys face in trying to give a client an estimate of what their claim may be worth is that the value of a claim depends on so many factors, most importantly, severity of the injuries sustained, the cost of medical treatment, and liability. Generally speaking, when a client first meets with their attorney, it’s simply too early for the attorney to let the client know what their claim is worth, primarily because the client is probably still receiving medical treatment, thus the extent and expense related to their injuries is unknown at that point. Without knowing these two essential components of any injury claim, no credible attorney could put a value on your injury claim. Valuing your claim is one of the most critical aspects of any Texas personal injury case, and it is also one of the most difficult. Figuring out what a claim is worth is based on multiple factors.
Based on my experience in practicing injury law in Texas, there are definitely some important factors that insurance companies use to value injury cases. And, while case valuation is not an exact science by any means, when insurance companies place a value on your claim they generally rely upon the factors discussed below.
Damages Texas Insurance Companies Consider
Before you can determine what your Texas personal injury claim is worth, you first have to know the types of damages for which you can be compensated. In Texas, the most common types of damages that are compensable by a negligent party’s insurance company:
A Formula For Calculating Damages
In determining fair compensation for your injuries, it’s fairly easy to calculate medical expenses, lost wages, and property damages, however, putting a dollar amount on mental anguish, pain and suffering, and loss of consortium damages is a much more difficult task.
At the onset of your claim, an adjuster will usually add up your “medical special damages,” often referred to as simply “specials.” This number will act as the base damages from which the adjuster will work. The adjuster uses this base figure to calculate how much to pay for pain, suffering, and other damages that are more difficult to calculate, which are referred to as “general” damages.
In cases where the injuries are somewhat minor, the adjuster multiplies the special damages by a number from 1.0 to 2.0, often the number is 1.5. However, when the injuries are more serious, will require future medical care, or include somewhat permanent injuries or disfigurement, the adjuster could multiply special damages by up to 5. Additionally, in rare cases where there are extensive and extreme damages, the multiplier can be 10 or more.
After the adjuster has calculated the damages based on the special multiplied by the appropriate multiplier, the adjuster will then add the amount of lost wages incurred by the injured person. So, the complete formula would look something like this:
(Special Damages x Multiplier) + Lost Wages = Case Valuation
That being said, you shouldn’t expect the insurance company to immediately offer you the value of your case. After all, the insurance companies don’t rake in Billons every year by paying injured victims fair compensation. This is where having an experienced injury attorney on your side comes into play.
Likely the most important factor that will affect how much the opposing insurance company will be willing to pay on a claim is the liability calculation, meaning the extent to which each party was at fault. While the damage formula gives you a range of how much your case may be worth, it only applies after determining liability (which party was at fault for the accident). It’s possible, and the insurance company will do all that they can, to claim that each person was somewhat at fault for the accident. If they can say you, the injured person were 20% at fault because you applied your brakes suddenly and without warning, or that the accident was caused by unforeseen factors (acts of god) such as icy roads, etc., the insurance company may try to reduce the value of your claim. This is especially true for those people who are not represented by an experienced injury attorney.
This principle is called comparative fault, and while the laws of each state may vary when it comes to comparative negligence, it’s almost certain to be something that the insurance company will factor into the valuation of your claim. Whatever the rough percentage of your comparative negligence, be it 10%, 30%, etc., the insurance company try to will devalue your claim by that percentage.
That is why having an experienced injury lawyer on your side is imperative. Simply being represented by an attorney is not sufficient; rather, you need someone who is familiar with claim valuation, and the underhanded insurance company tactics. More importantly, you need someone who won’t cut bait and run when the insurance company digs their heels in. Bottom line, you need someone who specializes in personal injury, rather than someone who dabbles a little in many areas of the law.
If you have been injured in an accident, and would like more information on whether or not you have a good case, please give Barrus Law Group a call. We offer a FREE evaluation, and can help answer many of the questions you are likely to have. To discuss your claim with an experienced injury attorney, call us at (210) 593-8709.