How Do Insurance Companies Calculate Traffic Accident Injury Claims?

In the aftermath of a motor vehicle accident, victims are often unsure about how much compensation they can recover. But it is critical to understand how insurance companies calculate the value of traffic injury claims.

Understanding the process of calculating a claim’s value will help you to avoid lowball settlement offers. If you or someone you love has been involved in an auto accident, it is important to consult with a legal professional.

A trustworthy accident attorney can help you to recover the auto accident compensation that you are owed. 

Below, we will explore the ways that insurance adjusters assess the value of car accident injury claims. We will also discuss the ways that a trustworthy accident attorney can help you secure the money that you need.

The Standard Auto Injury Settlement Formula

Car insurance providers are very efficient at estimating the value of claims. However, they are also incentivized to pay claimants as little as possible.

By collecting premiums and offering low settlements on claims, insurance companies maintain their profit margins. Typically, these companies evaluate a claim based on what they believed they would owe if a trial took place.

When a claimant wins a verdict in the courtroom, they are owed “damages.” Damages are payments made to car accident victims from a negligent party or their insurance provider.

There is no legal requirement that insurance companies use a particular formula to estimate the value of claims. However, most insurance providers use the following method: 

Special Damages x (Multiplier Reflecting General Damages) + Lost Income = Car Accident Settlement Amount 

This formula allows companies to determine the monetary value of auto accident claims. Many accident victims are unaware of the concepts of “special damages” and “general damages.” 

These concepts are relatively simple, but applying them in your accident or injury case may not be.

This is one reason why collision victims should speak with a knowledgeable injury lawyer. An auto injury attorney can ensure that the insurance provider’s estimate is adequate.

You should never accept a settlement offer that is less than you deserve. 

Understanding Special Damages

Special damages are a type of payment intended to compensate the victim for their losses. Specifically, these payments make up for losses caused by the actions of a negligent party.

Special damages cover the direct monetary costs and losses from an accident or injury. These payments are also known as “economic” damages.

The following documents can be used to assess special damages:

• Receipts
• Bills
• Invoices
• Bank statements
• And more

Common examples of special damages include payments to cover the costs of:

• Replacing and repairing damaged vehicles or other property
• Lost wages due to missed work following the accident
• Lost earning capacity in the long-term due to disability
• Current medical care and treatments
• Future medical needs
• Lost items that are irreplaceable

Typically, it is not difficult to calculate the value of special damages in an auto accident case. The insurance provider or the claimant’s lawyer simply finds the sum of the victim’s monetary losses. 

Understanding General Damages 

General damages are payments made to cover the intangible losses that a victim suffers. Not every outcome from an auto accident or traffic injury results in direct monetary losses.

Some of the most difficult consequences do not affect the victim’s financial life at all. Still, these intangible harms are incredibly difficult, and victims deserve compensation. 

Many types of injuries can result in permanent alterations to the victim’s daily life. Some of the most common examples of general damages include payments to compensate for:

• Physical pain and suffering
• Physical impairment
• Disfigurement
• Mental distress and anguish­
• Anxiety, stress, and panic
• Embarrassment
• Loss of consortium, relationship, or companionship in wrongful death claims
• Decreased quality of life

Assessing the value of general damages in an accident case is complex. Because there is no direct financial loss, adjusters typically use a “multiplier” method.

This means the adjuster selects a number to represent the severity of the general damages that the victim sustained. The more severe the damage, the higher the multiplier.

In most cases, general damage multipliers are set to a value between 1 and 5. If you have questions regarding the value of your car accident or injury claim, speak with a knowledgeable accident attorney.

Match with an Experienced Attorney Today

If you have been involved in a traffic accident, do not hesitate. Consulting with an experienced attorney will ensure that you pursue the full amount of compensation that you are owed.

When you visit TrafficAccidents.com, we will match you with a qualified legal representative who can effectively fight for you. Fill out the consultation form or call us to match with a skilled accident attorney. Get the money that you deserve!