People often want to know if there is a car accident settlement formula the insurance companies use to determine the amount they are willing to pay to accident victims. The answer is not a simple “yes” or “no” because many factors are taken into consideration by the insurance adjuster when calculating an auto accident settlement. The purpose of the settlement is to pay for car repairs, medical expenses and lost wages as a minimum in order to make you whole again. In some cases an amount for pain and suffering is added, and that is always a negotiable amount.
Calculating the Base Settlement Value
Some states use a computer program called Colossus to figure the amount of settlement that will be offered to an accident victim. The computer generated amount is then reviewed and amended by an insurance adjuster. In other states the adjuster handles all of the settlement calculations.
Most settlement calculations begin by figuring the objective valuations. These amounts include medical expenses, ambulance costs, lost wages, additional expenses incurred as a result of the accident, property damage, auto repairs or replacement, and any other documented expenses related to the accident.
The objective expenses must be supported by documentation such as accident reports, medical bills, auto repair estimates and other receipts. These quantifiable expenses make up the base calculation whether calculated by a computer or an adjuster.
Pain and Suffering Calculation
The more subjective component of the settlement calculation is the amount to be paid for pain and suffering. In most cases, this amount represents a multiple of the base or objective amount. You would figure the base amount and then multiply it by two or three to arrive at the amount the insurance company might be willing to pay.
The multiplier can be higher in the event the pain and suffering is severe. Pain and suffering is a concept that encompasses the psychological, emotional and physical aspects of the injuries and the impact of the accident on your ability to function in a way that is equal to your pre-accident lifestyle.
There are many different variables that go into the pain and suffering calculation. For example, if you suffered chronic or disabling injuries you will be entitled to higher compensation than someone who fully recovered eventually. Other typical variables include whether the accident victim is disfigured, emotional distress, psychological trauma, probability of full recovery, driving record and even the level of negligence on the part of the person causing the accident.
Consult an Attorney
You should consult an attorney in any accident where there will be subjective variables in the settlement calculation, when injuries are incurred, or when the insurance company does not offer a fair settlement. A personal injury attorney is qualified to negotiate with the insurance company to insure you get the compensation you are entitled to receive.
