Many potential clients mistakenly believe that the value of their case equals three times the total amount of their medical bills, i.e., $5,000.00 in medical bills means your case is worth $15,000.00. This formula is mostly inaccurate and drastically oversimplifies the process adjusters and attorneys use to value personal injury cases. Generally, the following categories of damages are considered when valuing a case: (1) past and future medical expenses, (2) lost wages and loss of earning capacity and (3) pain and suffering. In addition to these general categories of damages, insurance adjusters and attorneys consider numerous factors including, but not limited to, the following:
Damage to Your Vehicle: In auto accident cases, adjusters almost always first look at the damage to your vehicle to determine the value of your case. Cases with minor damage to the vehicle are considered “low impact cases” and adjusters usually make much lower settlement offers in these cases. In the alternative, if your vehicle is totaled or significantly damaged, you will usually receive a higher settlement offer. It should be noted that low impact cases will still likely receive low settlement offers even if there is a significant amount of medical bills. In these cases, insurance companies will hire experts to testify and introduce evidence at trial to show that such low impact cases don’t require costly medical treatment. Clients should be particularly mindful of the cost of their medical treatment if their case is low impact, especially if they are being treated on a lien. If medical treatment is not covered by the settlement, jury award or insurance, it is the client who bears the expense for any unpaid medical costs.
Whether You Have a Visible Injury: The term visible means an injury that can be seen with the naked eye or through diagnostic testing such as an x-ray. For example, visible bruises and broken bones usually result in higher settlement value.
The Extent of Your Necessary Medical Treatment: Adjusters and attorneys don’t simply look at your amount of medical bills in evaluating your case. They look at your medical records in detail to determine the extent of your injuries. Cases that involve more serious and invasive medical treatment will usually result in higher settlement offers. For example, cases that involve surgery and/or hospital stays will garner a higher settlement offer than those that involve only chiropractic treatment. Also, it is important to mention that insurance adjusters will only consider medical treatment that is deemed necessary. For example, adjusters often exclude visits for ice packs and massages when attempting to value a case. More specifically, a claim that involves $15,000.00 in chiropractic treatment will likely receive a much lower settlement offer than a case that involves a $15,000.00 hospital stay. Therefore, it cannot be stressed enough that clients have to be mindful of the medical costs they accumulate during treatment, especially if they are being treated on a lien.
Also, in evaluating a client’s medical treatment, adjusters and attorneys look at when the medical treatment began and if there are any gaps in treatment. Cases in which clients delay treatment or only receive treatment sporadically typically receive lower settlement offers.
Previous Injury: Adjusters also consider whether clients had an injury prior to the accident. For example, a client’s neck was previously injured and he suffers whiplash from an accident. The insurance company will likely attempt to contribute the whiplash to the client’s previous injury to reduce the amount of the client’s damages from the accident, resulting in a lower settlement offer.
Whether There Are Special Circumstances Such As Drugs/Alcohol: Another factor adjusters and attorneys consider is whether the other driver was under the influence of drugs/alcohol or engaged in other bad acts, such as reckless or aggressive driving. Insurance companies know jurors don’t like drunk drivers or those under the influence of drugs. Cases that involve these types of bad acts by the other driver usually result in higher settlement offers.
Your Background: Even in cases where you are not at fault, insurance companies will review your background in valuing your case. They will look at your criminal history, driving history and the number of lawsuits you have previously filed, among other things. Insurance companies and attorneys review your background to gain a perspective of how likeable you will be to a jury should your case go to trial. If there are significant blemishes in a client’s background, he/she may receive a lower settlement offer.
Venue: Adjusters and attorneys look at venue, or the court in which your case will be filed, in determining the value of your case. Some counties are known for unusually high or low jury awards for personal injury cases. If your accident occurs in a venue where awards are typically low, you may receive a lower settlement offer.
The Cost of Taking Your Case to Trial: Last but not least, one of the most important factors in valuing your case is the cost required should your case go to trial. Even before the filing of a lawsuit, both your attorney and the insurance company will estimate the cost of trial in the valuation of your case. Proving your case once a lawsuit is filed requires significant costs. Specifically, it costs money to file and serve a lawsuit. Also, it is very expensive to have your medical providers sit for depositions or attend trials to testify on your behalf. It is important to note that litigation costs are reimbursed to your attorney from any settlement or jury award you receive. Because litigation is so expensive, this means there is the potential that your settlement or award will be drastically reduced even after “winning” your case at trial. Finally, just as plaintiffs’ attorneys look at the costs of litigation, so do insurance companies. If a particular insurance company has worked out an agreement or flat fee arrangement with local defense counsel to reduce their litigation costs, this insurance company will be more inclined to make lower settlement offers because they have removed the risk of costly attorneys’ fees on their part should you decide to file a lawsuit.
Again, this list is just a sampling of the many factors that are considered when valuing a personal injury claim. Because valuing a personal injury case is a complex process and each case is different, it is highly recommended that you speak with a personal injury attorney to assess how much your case is worth. If you need to consult with an attorney about the value of your personal injury case, contact the Faucette Law Firm at (770) 485-6620.