If you’ve ever filed a claim with an insurance company, then you may be curious as to exactly how your claim amount is decided. While most people are aware insurance companies use a formula to calculate claims, few understand what the formula entails or exactly why it was put into place. Fortunately, the damages and compensation formula used by insurance companies is not a secret, and is easy to understand after it’s been fully explained to you.
Read about the damages and compensation formula and find out how this calculation will directly impact the amount you get for your personal injury lawsuit.
Why Does the Formula Exist?
When an accident occurs and fault is clear, the insurance company of the person responsible for the accident will generally have to pay fairly steep compensatory amounts. While this can include concrete numbers, such as medical expenses, lost wages and the cost of adjusting to lifelong disabilities, it can also encompass less quantifiable factors like mental pain and suffering, damage to a person’s social life and loss of major life experiences.
Because damages following a major injury are so complicated, the damages and compensation formula was invented to make sure that injury victims received the right amount and that insurance companies weren’t paying out exorbitantly high claim amounts.
How the Formula is Used in a Personal Injury Claim
In the damages and compensation formula, there are two numbers that will determine your final claim amount. The first number is referred to as medical special damages, which are all the medical expenses you’ve incurred as a result of your accident; the other number is called general damages, and this includes everything not medically related, including mental and emotional pain.
First, your insurance adjuster will total your medical special damages. Next, the adjuster will multiply your medical special damages by 1.5 to 5 times, depending on the severity of your injury, to calculate your general damages. Finally, your lost wages will be added on.
Insurance Companies and Other Factors to Consider
Now that you understand more about the damages and compensation formula, it’s time to discover how this can play out during your personal injury claim. Generally speaking, your insurance company will not disclose their exact formula, which means you won’t know exactly how your general damages will be determined. This is a common negotiation tactic and should be expected.
However, you can get a good idea how much your general damages might be based on how severe your injury was. For example, if you require continuing medical care, will suffer a lifelong disability or will never be able to return to work, the general damages multiplier will probably be closer to 5 than to 1.5, which means your final compensation amount will be much higher.
Let an Experienced Attorney Explain the Formula to You
If you’re considering filing a personal injury claim after a major accident and would like a little more information about the damages and compensation formula, you should consider getting advice from an informed lawyer like Robert White, Attorney at Law.
Robert White and the rest of the team at Childs, Bishop & White, PC fully understand the damages and compensation formula and can help give you an idea of what the final numbers will look like in your case. We can also handle any insurance company negotiations so that you get the settlement level you need. Tell us about your case today so that we can fight for you.