How Does An Insurer Place A Calculated Value On A Personal Injury Claim?

Obviously, an insurer cannot place a calculated value on a personal injury claim without knowing what formula to use and what numbers have to be placed in that same formula. This article will begin by explaining the source of the numbers that need to go in the insurer’s formula.

The value of the damages that must be compensated get added to create one number

• Medical expenses: The total for all the bills sent to the victim from those professionals and facilities that contributed to the victim’s treatment.
• Income lost: This covers more than just the income lost while the victim recovered from his or her injury. It also includes that any earnings that could be denied a worker that was unable to return to a former job.
• An acquired disability or disfigurement
• Loss of valuable experiences: This would include the inability to attend a training session. It would also take into consideration any vacation that had to be cancelled or postponed.
• Emotional challenges: This attaches a number to embarrassment, depression and anxiety.
• Property damage

The calculation made by the insurer

By summing up all the value for each of those damages, an insurer can learn the value of an amount that is called the specials. The insurer must multiply the specials by a figure that corresponds with the impact of the victim’s pain and suffering. Typically, that figure lies somewhere between 1.5 and 5 as per the calculations of injury lawyer in Medicine Hat.

If the victim did not suffer a severe injury, the number plugged into the insurer’s formula will be closer to 1.5. On the other hand, if the victim has suffered a debilitating injury, that number could be as high as five, or maybe even a figure that exceeds that higher number. The existence of a severe injury increases the value of the personal injury claim.

The insurer takes the product obtained by multiplying the specials and the number between 1.5 and 5. The insurer then adds that figure to one that represents the victim’s lost income. That total gets multiplied by the % of the fault that has been assigned to the defendant. The product of that calculation becomes the value that the insurer will assign to the policy holder’s personal injury claim.

What does the insurer do with that calculated value?

That value becomes the starting figure in the negotiations, which the insurance company must make with the victim or the attorney that is representing the victim. The victim’s response to that starting figure falls quite a bit below the insurer’s calculated value. The offer and response get modified, and the offer from the insurance company increases. The offer and response sequence gets repeated several times. Ideally, the two sides agree on a settlement figure.