How Much To Ask For In A Personal Injury Settlement
A personal injury settlement is an agreement between a plaintiff and a defendant to resolve a lawsuit outside of court. In many cases, attorneys demand the full value of the defendnant’s policy limits. Rarely do they actually receive the full amount.
Accidents rarely happen without someone being at fault. When negligence or intentional conduct on the part of another person causes you or a loved one to sustain injuries in an accident, you may be entitled to recover compensation for your damages.
Your personal injury attorney will review your case to determine how much to ask for as a personal injury settlement that is fair and compensates you for your losses. Here are some of the methods used and factors considered by personal injury lawyers and liability insurance companies to evaluate the value of cases before attempting to negotiate a personal injury settlement agreement.
The chance of being injured in an accident is actually greater than you may want to believe. According to the most recently available data from the National Highway Traffic Safety Administration, there were 5,215,071 non-fatal car accidents in the United States in 2020 that caused 2,282,015 people to sustain injuries. Another 38,824 people died in motor vehicle crashes during the same year.
It’s not only car accidents that cause people to be injured and require medical treatment. According to the Consumer Product Safety Commission, adults who are 65 years of age and older account for an average of 1.5 visits to emergency rooms annually for treatment of injuries caused by slips, trips and falls on floors and stairs in and around the home.
If you have been injured in a car accident, slip-and-fall accident or other type of incident caused by the negligence or carelessness of someone else, how much should you ask for in a personal injury settlement is an important question. The following information about the key factors affecting the amount of personal injury settlements and tips for maximizing the amount of money that you receive as compensation in your personal injury case should be discussed with the experienced personal injury attorney you’ve chosen to handle the case for you.
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Before the time comes to make an initial settlement demand, the key takeaways to bear in mind when calculating the value of the case and how much much to ask for to settle it include:
- Severity of the injuries: This may be the biggest factor in determining the settlement amount. Cases involving severe injuries requiring extensive medical treatment, physical therapy and long recovery times usually result in larger settlement offers from adjusters for insurance companies than do cases with only minor injuries.
- How the injuries affect you: How old you are, your employment status, and your ability to return to work after the accident factor into the calculation of the expected settlement amount. For example, injuries that leave you with a permanent disability that limits your ability to work and reduces your earning capacity increase your damages and can result in a bigger settlement amount than making a full recovery and returning to working as you did prior to the accident.
- Availability of punitive damages: Depending on the facts of the case and the conduct of the party at fault, the state or federal law that applies to your claim may allow you to recover punitive damages. Jurors sometimes award punitive damages to punish the party at fault for conduct or behavior that is particularly egregious. For example, jurors in a medical malpractice case may be inclined to award punitive damages to a plaintiff suing a surgeon whose intoxication while performing surgery resulted in severe injuries to the patient.
Following is a look at methods for calculating the value of a personal injury case along with tips to help you and your attorney to maximize the settlement amount.
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Types Of Damages
Before looking at the method for calculating the value of a personal injury claim to determine its settlement value, you need to understand the different types of damages. If you are injured in a car crash or other type of accident, the losses you incur as a result of those injuries are your damages. Damages are broken down into economic damages and non-economic damages.
Economic damages represent your out-of-pocket expenses that can be readily proven with receipts and invoices. The following are a few examples of economic damages:
- Medical expenses, including doctors, hospitals, prescription medications, X-rays, and other health care costs.
- Physical therapy and occupational therapy costs.
- Anticipated future medical expenses for additional treatment and care.
- Lost wages while recovering from your injuries.
- Lost or diminished future earning capacity.
- Cost of specialized medical equipment.
- Long-term nursing and home care services.
- Cost of repairing or replacing property damaged in the accident.
Non-economic damages are more difficult to prove because they are less tangible and not as readily quantified as economic damages. The following examples of non-economic damages associated with a personal injury claim may help to show how the two types of damages differ:
- Pain caused by the physical injuries that you suffer in an accident, including chronic pain.
- Emotional anguish and mental suffering.
- Loss of enjoyment of activities that you engaged in prior to being injured.
- Loss of companionship caused by being unable to engage with your spouse and children in the type of family relationship you enjoyed before being injured.
Putting a value on non-economic damages can be difficult because they are so subjective, which is why the method used by experienced personal injury lawyers and insurance adjusters to determine the value of a personal injury claim becomes so important when trying to achieve a settlement agreement providing fair compensation for all of your losses.
Method For Calculating Your Settlement Amount
Before your personal injury attorney sends a demand letter to get negotiations started in an effort to settle a personal injury case, the value of the claim must be determined. While your attorney is busy calculating how much a jury may award after a trial in order to know how much to demand during settlement negotiations, the insurance adjuster for the fault party is doing the same thing in order to save money for the insurance company by settling for less than the value of the claim.
The method attorneys and insurance adjusters use to calculate the value of a case is often called the “multiplier method.” It takes into account the difficulty in placing a monetary value on non-economic damages.
The first step in determining a settlement amount using the multiplier method is to add up medical bills and other economic damages. Be sure to include any future expenses related to anticipated medical treatment and care that your physicians believe you may require to fully recover from your injuries.
The next step in calculating settlement value of a personal injury case is to determine the value of non-economic damages, such as pain and suffering. Attorneys apply a multiplier of from 1.5 to 5 to the total economic damages to determine how much money to demand in non-economic damages. The multiplier used in a particular case generally depends on the severity of the injuries with a higher multiplier used in cases of severe injuries, such as a victim with traumatic brain injury, and a lower multiple in cases where a victim’s injuries are minor in nature, such as bruises and lacerations with no scarring.
An example or two may help illustrate how the multiplier method works. Assume that the plaintiff in a personal injury lawsuit was driving a car that was hit by another vehicle that failed to obey a stop sign. The plaintiff sustained a few minor lacerations and had medical bills of $1,200 with no time lost from work. Lawyers for the plaintiff may demand $1,200 in economic damages and $1,800 for pain and suffering, which is the economic damages multiplied by 1.5.
If the same plaintiff sustained multiple bone fractures and severe facial lacerations with $175,000 in economic damages. A lawyer might use 5 as the multiplier to demand $175,000 in economic damages and $875,000 in non-economic damages.
Personal injury laws do not provide a formula for calculating the value of pain and suffering or other types of non-economic damages, so some lawyers and insurance adjusters may rely on methods they develop on their own. Unfortunately, people who work for insurance companies typically do not reveal how they calculate pain and suffering.
A per diem or per day approach to calculating noneconomic damages assigns a dollar amount as the value of pain and suffering for one day, which is then multiplied by the number of days of recovery time experienced by a plaintiff. The total becomes the settlement value of the case when added to economic damages. The per-day value assigned by an insurance adjuster depends on the severity of the injuries and other factors the adjusters or their insurance companies believe affect the degree of pain and suffering an accident victim experiences.
Calculating noneconomic damages is obviously not an exact science. It takes an experienced personal injury attorney and adjuster to evaluate the evidence, the injuries and unique circumstances of a particular legal action using their knowledge of past results in similar cases that have gone to trial or settled in their state. They also make use of services and websites that publish recent jury awards to give them a better idea of the ultimate value of your case.
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Your attorney may send a demand letter or simply call the insurance adjuster handling the claim to initiate settlement negotiations with the insurance companies for each of the parties at fault for causing the accident. Keep in mind that as hard as your lawyer works to get you the maximum amount of compensation for your injuries, adjusters work equally as hard to minimize the actual dollar amount their insurance companies pay out to settle the claim.
Effective negotiation strategies your attorney may rely upon include:
- Ask the adjuster to disclose the coverage limits of the insurance policy. An insurance company will only pay up to its policy limit regardless of the actual value of your claim. If the policy limit is not enough to cover the damages that you incurred, your lawyer may suggest filing a claim through the underinsured motorist coverage that you may have as part of your own car insurance policy.
- Do not be alarmed if the first offer from the insurance company is substantially lower than the amount demanded on your behalf by your legal team. Insurance companies sometimes use a low-ball offer as a starting point hoping that an anxious claimant will jump at it. Be patient and listen to the advice given by your attorney.
- Negotiations take time and may break down only to be started again at a later stage in the lawsuit. The opposing sides may break off negotiations while they gather additional information about the accident and injuries through the discovery process in the lawsuit and restart them later.
Trust in the experience and skills of your legal representation to guide you through the negotiations, but always remember that the ultimate decision about accepting or rejecting an offer to settle is yours to make.
Maximizing Your Settlement Amount
You need to have a strong case in order for the fault party’s insurance company to agree to settle for an amount of money that adequately compensates you for your losses. Here is how you can maximize your settlement:
- Seek medical attention as soon as possible after an accident to document the injuries.
- See your treating physicians regularly and follow all treatment plans prescribed by them.
- Keep a record of all expenses that you incur related to the accident, including medical costs, lost wages, and other out-of-pocket expenses.
- Keep a diary and use it to make daily entries of how the injuries that you sustained in the accident affected your life. Include notes about how physical pain or emotional distress affects your daily life and ability to interact with family members and other people.
Above all else, be honest with your doctors and your attorney about the severity of your injuries and how they affect you.
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If injured in an accident caused by the negligence of another party, a good place to learn about your rights against the fault party and options for exercising them is during a free consultation with an experienced personal injury attorney. Having your injuries evaluated by a doctor immediately after the accident is one way to maximize your settlement. It is always important to document your injuries and have proof of causation.
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