Do insurance adjusters use a specific formula when making an offer?

If you have been injured in a car accident or from the negligent actions of another person you may have severe injuries. Not only could you lose thousands of dollars if you miss weeks or months of work but you also may have high medical bills. Recently on our legal forum a user asked, "If I have been injured due to the negligence of another person and I am trying to settle with their insurance adjuster, how will I know when the adjuster has offered their final offer? Do they use a specific formula to make their offer?"

How do I calculate the cost of my claim?

Calculating the cost of an injury claim is one of the most important aspects of your claim, but it can also be the most difficult. Although the insurance company may not have a specific formula for making their offer, assuming their client is at fault, there will be certain expenses they expect to pay.

For instance, at the very least the offer should include all future, current, and related medical costs, including costs for continued treatment. The offer should also compensate you for any permanent injuries or disabilities and property loss. It also should compensate you for all lost wages, including future and current wages. Finally, the offer should also include compensation for pain and suffering and other "emotional" losses or damages such as depression, loss of consortium, or embarrassment.

So how will the insurance company calculate their offer? The medical expenses which can be calculated are added together. To determine the amount for pain and suffering, however, because there is no set figure, the insurance adjuster will generally use some type of multiplier. This multiplier is multiplied by the total amount of medical costs to arrive at the amount for pain and suffering. If the injuries are serious and the pain and suffering is considered high, the multiplier will be high.

Finally, the costs for medical bills, the amount of pain and suffering, and the lost wages are all added together to derive a total amount for your losses. This amount is generally the initial offer, although negotiations are to be expected.

What if I contributed to my own injuries?

Understanding what fault you had in the accident is critical to your case. Consider, in some states if you were at fault in any way for your injuries and the case is litigated, you will not be awarded any money. Other states will only award money if the plaintiff is less than 50% at fault. Other states require the plaintiff to be less than 51% at fault.

If you have been determined at fault for your injuries this is likely to influence the insurance settlement offer. As mentioned above, state laws vary, but it is likely that your award could be reduced by the amount of your fault.

Do I have to file a lawsuit to get a fair settlement offer?

Although some insurance companies may be willing to negotiate in good faith, some attorneys argue that it may take a lawsuit or the threat of a lawsuit to have the insurance company take you seriously.