How Do Adjusters Arrive At The Initial Settlement Offer?

Someone that has submitted a personal injury claim should prepare to negotiate with the insurance adjuster. The negotiations start after the same adjuster has made his or her initial offer. How does the adjuster decide on the figure to use when making that particular offer?

The adjuster investigates each assigned claim.

For a 3rd party claim, the adjuster learns the claimant’s story and the policyholder’s story. For a 1st party claim, the claimant is also a policyholder. Personal Injury Lawyer in Medicine Hat know that the adjusters always check to see whether or not a claimant has submitted any previous claims.

In order for the adjuster’s investigation to proceed, the claimant needs to furnish the insurance company with specific documents: medical bills, medical records and proof of income, if the claimant is employed. Adjusters go after other documents, such as the police report.

What the adjuster does with the claimant’s information?

The adjuster’s next task involves making a series of calculations. The first of those calls for summing up the totals on each of the medical bills. That produces a figure that represents the claimant’s special damages.

Next the figure for the special damages must be one factor in a new calculation. The second factor could be a multiplier, a number between 1 and 5 that corresponds with the extent of the claimant’s pain and suffering. The product from that calculation would get added to the value for the claimant’s lost income.

If the adjuster’s employer had chosen to use the per diem method, then an estimate for the daily value of the pain and suffering would get multiplied by the number of days in the recovery period. That product would get added to the special damages and the value of the lost income.

Those calculations would produce a figure that the adjuster could show to the insurer. The insurer would then indicate what percentage of that calculated figure should be used as the initial offer.

The size of the percentage chosen by the insurer varies, depending on the presence of absence of other factors. For example, if the claimant had hired a lawyer, then a large percent of the calculated figure would be presented in the initial offer.

On the other hand, if the claimant had not retained an attorney, then the initial offer would be only a small percent of the number obtained from the calculations. That fact underscores how claimants can benefit from hiring an injury lawyer.

Claimants must respond to that initial bid. Lawyers have the ability to help claimants that have received such a bid. A lawyer’s experience could guide such a claimant, as he or she struggled to arrive at the amount of money to quote in the counteroffer, the one anticipated by the adjuster.