How Do Insurers Value a Personal Injury Claim in New York?
Understanding how much compensation you should receive in a personal injury claim is vital to your recovery. Your injury settlement must pay for your ongoing medical costs, along with the other financial, physical, and emotional losses you incur. Accepting a lower settlement than you deserve can cause additional hardships later on, so calculating your estimated case value is a necessary step.
The motivations of the insurance representatives who must pay your settlement may differ from your own. While no two cases are the same, New York insurance adjusters use similar methods to value personal injury claims—and in some situations, they may offer you a lower settlement than you actually need.
What Types of Damages Do You Qualify For?
Before an insurance company can offer you a settlement, it will determine which damages you qualify for. The insurance company will typically pay for your economic and non-economic damages following your accident. Economic damages involve your out-of-pocket losses, while non-economic losses refer to the physical and emotional pain you endured due to the accident.
Common types of personal injury compensation include the following:
- Past and future medical care
- Lost wages you incur during your recovery time
- Property damage sustained in the accident
- Chronic pain, disfigurement, or permanent disability
- Loss of future earnings if your injury prevents you from working
- Emotional damages, such as post-traumatic stress disorder
Calculating Economic Damages for Insurance Settlements
When it comes to your tangible losses, insurance companies follow a relatively straightforward process to determine your claim’s value. The representatives will simply add up your costs and losses based on the paper trail you leave behind. All of your economic losses, however, will need to directly relate to the accident.
You will need to submit evidence of these costs to prove your need for these damages, providing documentation such as medical bills, repair invoices, and pay stubs. Your lawyer will help you prepare and gather this necessary information.
Insurance Companies and Non-Economic Damages
Calculating non-economic damages is more complicated. You cannot assign a dollar value to depression as easily as you can calculate the cost of a surgery, for example. Because of the nature of these damages, insurance companies often use their own formulas to determine the value of your pain and suffering damages.
There are two common methods these companies often use:
- The per diem formula assigns a dollar value to each day you cannot work due to your injuries. The company will then multiply your days out of work by the per diem amount to determine your non-economic damages. For example, if you are out of work for 30 days and the company assigns a $100 per diem, your non-economic damages will total $3,000.
- The multiplier method assigns your case a number based on the severity of your injuries. Minor injuries may receive a 1 or a 2, for example, while severe, debilitating injuries may receive a 5. The insurance adjuster will multiply the value of your economic damages by your multiplier to determine the value of your non-economic damages. For example, if you have a multiplier of 2 and claim $5,000 in economic losses, your non-economic damages will total $10,000.
The exact formula may differ depending on the insurance company, but calculating your estimated settlement value is a necessary step prior to entering insurance negotiations. If you are unsure of the value of your claim, speak to a New York personal injury lawyer as soon as possible.
Your attorney will utilize his or her experience to help you understand how much money you may qualify for, allowing you to better prepare for the insurance process.