A Guide To Insurance Valuations On Claims
If you have been injured due to the negligent actions of another person or organization, one of the first questions you are likely asking is: how do insurance companies value personal injury claims? The honest answer is that it varies, and understanding how insurers approach this calculation is one of the most important things you can do to protect yourself from accepting far less than you deserve.
How Insurance Companies Calculate What Your Claim Is Worth
Insurance companies use a variety of methods to evaluate personal injury claims, and none of them are necessarily designed with your best interests in mind. One traditional method that has been used for decades is a simple multiplier approach: your case is worth two to three times the amount of your medical bills. So if you incurred $10,000 in medical bills, the insurer might open settlement negotiations somewhere between $20,000 and $30,000.
The problem with this approach is that it is highly subjective and frequently inadequate. A case with relatively modest medical bills may actually be worth far more than the multiplier suggests if the injuries are permanent, severely impact your quality of life, or affect your ability to work. Conversely, a case with large medical bills might not warrant the same multiplier if the injuries healed quickly and left no lasting effects. The raw number on your medical bills is just one piece of a much larger picture.
Many insurance companies, rather than trying to arrive at a fair value, simply try to low-ball every claim and hope that the injured party will accept a quick settlement without fully understanding what they are entitled to. This is why having an experienced attorney evaluate your claim before you accept any offer is so important. You can learn more about how much to ask for in a personal injury settlement and what questions to ask before accepting any offer on our website.
Economic Damages: The Calculable Losses
Economic damages are the losses that can be added up with a degree of precision. They include past and current medical bills, lost wages from time missed at work, property damage, and other out-of-pocket costs directly tied to the accident. These are relatively straightforward to document and present, though insurance companies will still often dispute them.
Future economic damages are more complex. If your injuries require ongoing medical treatment, additional surgeries, physical therapy, or long-term care, those future costs need to be estimated and included in your claim. Similarly, if your injuries have reduced your ability to earn income going forward, that loss of future earning capacity must be calculated and factored in. Arriving at accurate figures for future damages requires the help of qualified experts, including physicians who specialize in projecting future medical costs and vocational rehabilitation specialists who can assess the impact of your injuries on your earning capacity. A skilled personal injury attorney will know which experts to retain and how to present their findings effectively.
Non-Economic Damages: The Losses That Cannot Be Itemized
Non-economic damages are the losses that do not come with a receipt but are just as real and often just as significant as your medical bills. These include pain and suffering, emotional distress, loss of enjoyment of life, loss of consortium, and the psychological impact of permanent disfigurement or disability. Placing a dollar value on these damages is inherently difficult, which is exactly why insurance companies try to minimize them.
Attorneys argue for non-economic damages by presenting a full and honest picture of how the injury has affected every aspect of a client’s life. Daily pain journals, testimony from family members, medical records documenting mental health treatment, and expert testimony about the long-term psychological impact of an injury all help paint that picture. Understanding what pain and suffering compensation covers and how it is calculated is an important part of knowing the true value of your claim. You can also review the full range of damages you may be entitled to recover in a personal injury case.
What Happens If Your Case Goes To Trial
When settlement negotiations fail, a jury ultimately decides what a case is worth. A jury will review all of the evidence and, if fault and causation are established, will determine the appropriate compensation for both economic and non-economic damages. Jury awards can sometimes exceed what an insurance company would ever offer in settlement, but they can also fall short, and the outcome is never guaranteed.
It is always the goal of a skilled personal injury attorney to resolve your case through negotiation if at all possible. Litigation is expensive, time-consuming, and unpredictable. A fair settlement puts money in your pocket now without the risk of an adverse jury verdict, and avoids the possibility of having to pay the other side’s attorney fees and costs if the case is decided against you. That said, sometimes an insurance company is simply unreasonable, and taking the case to trial becomes the only path to real justice. An experienced attorney will know when to negotiate and when to fight.
If you are wondering whether your case is likely to settle or go to trial, our guide on what a personal injury lawsuit timeline looks like and our overview of the difference between a settlement, verdict, and judgment can help you understand what to expect.
Colorado’s Bad Faith Insurance Laws Give You Real Leverage
If an insurance company is unreasonably delaying or denying your valid claim, Colorado law gives you meaningful tools to push back. Under Colorado Revised Statute 10-3-1115, insurance companies are required to act in good faith when handling claims. Under Colorado Revised Statute 10-3-1116, an insurer that acts unreasonably can be held directly liable for twice the benefits that should have been paid, plus attorney fees. This is a powerful protection that an experienced attorney can use on your behalf when an insurer is playing games rather than dealing fairly. You can read more about your rights under our bad faith insurance page.
Get Experienced Help Today
The personal injury and insurance dispute attorneys at Rector Stuzynski Law Firm have decades of combined experience helping people protect their rights when dealing with insurance companies. We know the tactics insurers use to undervalue claims and we know how to counter them effectively. Call us today at (719) 578-1106 or fill out the contact form on our website to set up a free case review. We are available 24/7 and ready to go to work for you.
