If you feel that the insurance company does not play in your corner – and they seldom do – you need proper legal representation.
When a person has been hurt in an accident, the insurance companies will attempt to calculate the settlement amount they will have to pay for the victim’s damages. In many cases, the insurance company will figure out how much the court would order should they be held liable. There is a certain formula that the insurance companies and attorneys use to determine the accident compensation amount. You can use this as a guide to estimate how much you may receive for your settlement.
There are about six million car accidents in the United States each year, so insurance companies are well-versed in calculating accident claims. But, unfortunately, there is no standard method for calculating the amount of a settlement. Still, some commonly used formulas can help you determine a ballpark estimate of how much you can expect to receive for your damages.
The Multiplier Method
Most insurance adjusters use the Multiplier Method of calculating damages. The formula
- Totals up the medical bills that the victim incurred as a result of the accident
- Multiplies the victim’s total medical bills by a number from one to five, depending on the victim’s “general damages,” which includes elements like pain and suffering and other not quantifiable losses like loss of affection, trauma, and lowered quality of life.
- Adds any special medical damages, general damages, and lost or reduced earnings to arrive at a car accident claim value estimate.
Consider the following scenario:
You are hurt in an accident, and your medical bills total $5,000. The claims adjuster assigned your case a multiplier of two, so your medical damages are valued at $10,000. If you suffered $3,000 in lost wages, the adjuster would add these in as well. It would give the adjuster a ballpark estimate of $18,000 in damages. The insurance company will likely offer the victim a settlement that is less than this estimated amount.
Using this formula, the insurance company is trying to figure out how much a jury might award you in a trial. They have entire departments devoted to compiling and studying accident statistics and are well-versed in what potential juries might award.
How Insurance Companies Assign a Multiplier Score
There is no standard answer that indicates what multiplier score the insurance adjuster will assign to your case. In general, the lower numbers are usually assigned to straightforward cases with minor injuries requiring only one physician visit. Low numbered scores are typically assigned to fender benders or cases where the pain and suffering are not expected to last long.
The higher range of the multiplier scale is usually assigned to severe injuries that require long-term care, long hospitalizations, or ongoing rehabilitation.
A few other variables come into play when it comes to determining a multiplier:
- Was this injury a new one due to the accident, or did it aggravate an existing condition?
- Did you seek medical attention immediately following the accident?
- Was the amount of treatment reasonable? Insurance companies may refuse to pay for any medical expenses that they deem unnecessary or excessive.
Other factors are considered when the insurance companies calculate your potential settlement. These include your age, health, and earning potential at the time of the accident.
It is important to remember that the insurance company’s estimate is not the final word on how much you will receive for your car accident settlement. Sometimes, they will deny your claim. However, the most frequent thing they do is offer you a sum well below your expectations, let alone of what you deserve.
You can always reject insurance companies’ first offer and sue for an amount you feel the court will likely award for your damages. A car accident attorney can get the compensation you deserve, and finding an effective one is the best way to be fairly compensated for your injuries.
Bottom Line
If you feel that the insurance company does not play in your corner – and they seldom do – you need proper legal representation. First, hire a personal injury attorney from your state with years of experience winning injury and vehicular accident cases just like yours. A reputable law firm will help you get the money you need to restore your life following an accident. Don’t worry about attorneys’ fees either, as most first consultations are free.
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