What Value Does Insurer Place On Injury Claim?

An insurance company looks closely at the nature of the injury reported by any accident victim that submits a claim. Was it a simple or complex injury? What sort of liability protection did the policy holder have? The answers to those questions influence the insurance company’s view of a given injury’s value.

Of course, those questions and answers do not put a number value on any injury. Yet there is a formula that insurance companies use, in order to obtain such a figure.

A close look at the formula used by insurers

First, the insurer lists all of the victim’s medical expenses. Once they have been listed, then the costs associated with each expense can be summed-up. The total from that summation gets used in a special formula.

If the victim suffered only a minor injury, then the total gets multiplied by 1.5 or 2.0. The product represents the figure that is used in further calculations. If the victim endured a severe injury, then the same total gets multiplied by 5.0. Again, the product represents the figure that will be used in further calculations.

Most accident victims are adults with a job. During their recovery, they cannot work. Consequently, each of them suffers a loss of income. That loss can be represented by a number, the dollar value of the loss. That dollar value gets added to the figure obtained by using the formula, which multiplied a total by a number between 1.5 and 5. After the addition of that dollar value, the calculated number is the figure that the adjuster will use, when starting negotiations. In other words, that is the figure that will get mentioned to the accident victim that has chosen to negotiate with the insurance company.

Possible changes to the formula

The insurer studies the nature of the victim’s injury, before selecting the number that will be one factor in the equation that yields a product, one that can be used in further calculations. As mentioned, that factor could be 5, if the victim has suffered a severe injury. At times it might even be as high as 10. That would be the case, if the victim’s injury fell into the category that carries this label: catastrophic.

By using the formula, personal injury lawyer in Leamington knows that the insurer would see that at a trial, a plaintiff could demand a large compensation package. For that reason, the insurance company would feel pressured to settle, and to avoid a trial. On the other hand, the claimant’s lawyer might refuse to settle, because the full extent of the victim’s injuries might remain unknown.

Those contradictory influences offer a glimpse into how an injury’s value affects the actions of an accident victim’s supporters and challengers.