Getting into an accident typically results in the victim having expenses and damages. The expenses may be property damage, medical costs, bodily injury, or emotional trauma.
Before a claim goes to trial, it goes to an insurance company which evaluates the claim for settlement.
Insurance companies often rely on a formula or software to determine damages.
What is a damages formula?
When an accident occurs, may different factors need to be reviewed. Insurance companies need to look at medical care expenses, missed income/work, pain and physical suffering, permanent physical disability, diminished earning capacity, and emotional distress.
Medical cost and lost income can be reduced to numbers easily. These are objective measures.
While problems may arise in determining the ongoing cost of care, future medical costs can be estimated within a reasonable degree of certainty through the use of expert witnesses. The same can be said for future diminished earning capacity.
Damages for elements like pain, emotional distress and loss of enjoyment of life, however, come with greater subjectivity. What causes one-person emotional harm may not do the same to another.
How do insurers calculate medical special damages?
Medical special damages, or “specials,” are the first step to reviewing the cost of a claim. Because of the need to estimate ongoing medical care, adjusters often use what is called a “multiplier.”
A multiplier is a number that determines the factor of harm and ongoing problems someone is likely to have as a result of an injury. This number can vary from 1 to 5, or even higher.
For someone who will have long term care needs, the multiplier may be 5 or even higher. Using these numbers determines how much the insurance company is willing to pay to avoid litigation.
What factors impact the multiplier?
The type of injury and diagnosis is the most important factor insurance companies use to evaluate claims for settlement. Hard injuries increase the evaluation or multiplier while soft injuries decrease it.
For example, a hard injury such as a broken bone or nerve damage is quantifiable. This means it is hard to dispute the existence of the injury and it may have longer healing time. A soft tissue injury may be harder to diagnose or prove.
Another factor insurance companies consider is whether medication or treatment is required.
If an injury requires medication and ongoing treatment by a doctor, then the injury is considered more serious. This increases the multiplier.
What else does the damages formula use?
While specials are the starting point, they are far from the only issue reviewed. The damages formula considers additional legal issues that can help or hurt a case.
The type of medical treatment is one factor, i.e. surgery versus chiropractic care.
The second most important factor is whether the injury results in a permanent impairment rating according to the 5th edition guidelines from the American Medical Association.
Sometimes, the defendant is untrustworthy or unlikable. If, for example, the defendant was drinking and driving, the multiplier will increase.
If a plaintiff has a credible witness to the accident who can give testimony against the defendant, the value of the case increases because there is more evidence against the defendant.
In addition, if the plaintiff will make a sympathetic witness, the multiplier will increase.
If the plaintiff is a widowed, single mother of three children, a jury is more likely to feel sympathy for that plaintiff and therefore likely to award her more money.
What can a lawyer do to increase the multiplier?
Having a lawyer involved in your case will ensure that you maximize the settlement value of your claim.
A lawyer can assist with obtaining experts to determine future medical costs, diminished earning capacity and permanent impairment ratings.
Call Yearin Law Office Today
If you or a loved one have been injured in a car accident, we invite you to give Don Yearin at the Yearin Law Office a call at 480-526-9386 for a free consultation.