How is an Insurance Settlement Determined

Personal injury accident victims are often overwhelmed by the process. Understanding how insurance companies determine a “reasonable” insurance settlement and assign value to the accident will help you better navigate the system.

After an accident, insurance companies will often first have an insurance adjuster offer the victim a small financial settlement. Insurance adjusters work for the insurance company, and usually are not working for the victim’s best interest nor to protect the victim’s legal rights.

An insurance adjuster’s primary role at the insurance company is to determine the value of claims presented to the insurance company. Their primary purpose is to examine claims and settle for the least amount of money possible. The initial offer from the insurance company is often much lower than what many victims expect. The insurance adjuster’s goal is to reach a low settlement and keep the case out of court.

Knowing your rights and how to effectively negotiate will help you get the maximum compensation for your personal injury claim. Understanding how the adjuster approaches cases will help you better negotiate.

Insurance adjusters may seek several types of documentation, including statements from the parties involved in the accident, police reports, medical records, interviews with doctors, and even background investigations of the victim. They are often very meticulous in their research, looking for anything in the victim’s personal history that could discredit them.

It is important to remember that insurance adjusters are rarely on the side of the personal injury victim. The best way to ensure you are protected is to hire an experienced personal injury attorney.

Factors Considered by Insurance Adjuster

There are many factors that an insurance adjuster uses to determine what they think is a fair settlement:

• Documented expenses resulting from the accident (medical bills, property damage, etc.)
• Pain and Suffering
• Lost Wages and Income (past, present, and future)
• Physical Injuries and Disfigurement
• Emotional Damage

How is the Insurance Settlement Amount Calculated?

Documented expenses are often relatively easy to calculate, but other types of injury cannot be easily calculated. For instance, pain and suffering or emotional damage may not have a direct value association. Therefore, insurance adjusters might use one of two standard systems to calculate losses:

1. Per Diem System – The insurance company determines a daily value for the days the victim has suffered and then multiplies this number by the total days of suffering.
2. Pain Multiplier System – The insurance company totals the amount of money from lost wages and medical bills and multiplies by a number.

Adjusters also consider the total policy value when determining the offer. Many liability coverages have a maximum amount they will pay out for an accident. These limits mean that the insurance company will never pay more than this amount, regardless of the circumstances of the accident.

A Personal Injury Lawyer Can Help

If you have been the victim of an accident, speaking with a personal injury attorney can help you get the maximum settlement you deserve and help protect your rights. A personal injury attorney will first review your situation to determine if you have a case. Then, they will get to work gathering evidence and determining fair settlement value.

Personal injury attorneys have experience negotiating with insurance adjusters. They understand the many tricks and strategies used to limit your settlement. By hiring an attorney, you also show that you are taking your case seriously and are ready to fight for fair compensation. A personal injury lawyer increases your chances of winning and getting a larger settlement.

If you or someone you know has suffered personal injury in an accident, we can help. Contact Saladino & Schaaf today or call us at 270-444-0406 to schedule a free case review. You may be entitled to a higher settlement for your injuries, but you must act quickly. There are time limits on legal action.