How Do Insurance Companies Calculate a Settlement Offer?

If you’ve been injured because of someone else’s negligent acts, you may be able to file a personal injury claim and collect a settlement from the liable party’s insurance company. The settlement is designed to pay for any damages that your injury has caused.

To avoid being stuck with a low-ball settlement and ensure an insurer treats you fairly, you should consult our Chicago car accident attorneys at (312) 236-2900.

How Personal Injury Damages Are Calculated

An insurance company will use a special calculation known as the damages formula to determine how much your personal injury claim is worth. They will then use that number to come up with an offer.

You may be able to receive compensation for the following types of damages:

• Medical bills
• Lost wages
• Rehabilitation costs
• Emotional distress
• Pain and suffering

Understanding the Damages Formula

Once a personal injury claim is filed, an insurance adjuster will add up the total medical expenses associated with the injury to come up with a “medical special damages” number. This number helps the adjuster determine compensation for:

• Disability
• Pain and suffering
• Emotional damages

The adjuster will then typically multiply the medical special damages number:

• 1.5 to 3 times for minor injuries
• Up to 5 times or more for severe, long-term injuries

After this calculation, any income lost as a result of the injury is added.

In short:

Medical special damages x 1.5-5 + lost income = starting point for settlement negotiations

Keep in mind:

• Insurance adjusters usually do not disclose the formula they use to calculate your claim.
• The damages formula serves only as a starting point; other details regarding your accident will be considered during negotiation.

Why Insurance Companies Offer Low-Ball Settlements

Since insurance companies, like all businesses, exist to make money, they are known for offering low-ball settlements in personal injury claims. A low-ball settlement occurs when an insurance company comes back with a settlement amount that is well below reasonable.

To prevent getting stuck with an unfair settlement that doesn’t meet your needs, you should contact the Chicago car insurance lawyers at Staver Accident Injury Lawyers, P.C. We have years of experience negotiating with insurance companies and will work tirelessly to make sure that you receive the maximum compensation you may deserve.

Related Reading: What To Do If Your Car Insurance Claim Is Denied

Call Staver Accident Injury Lawyers, P.C. Today

Has an injury caused by another’s negligent behavior or reckless actions negatively impacted your life? If so, call Staver Accident Injury Lawyers, P.C. at (312) 236-2900 as soon as possible to schedule a free, no-risk consultation with one of the top-rated personal injury attorneys in Chicago, IL. With our legal support, you won’t have to settle for a settlement that’s well below the value of your claim.