Your Claim and Amount of Compensation

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After you have filed a claim with your insurance company, one of the first people you will encounter is the claims adjuster.  Their primary objective is to get you to sign a release of your entire claim as cheaply as possible. Knowing roughly how much you are entitled to is critical when it comes to negotiating a settlement amount with an insurance company.

The formula that most insurance companies use for calculating damages begins with adding up the medical special damages.  These are the total medical expenses incurred as a result of the personal injury.  Next they add general damages, which relates to pain and suffering, anxiety, depression or other non-monetary claims.

In the case of a personal injury claim where the injuries are not severe, the formula used is:

personal injury compensation = (special damages x 1.5) + income lost

For a claim in which the injuries are severe and lead to a large non-monetary loss (stress, anxiety, depression, loss of enjoyment of life or experiences), the formula used is

personal injury compensation = (special damages x 5) + income lost

Cases in which the injuries are extremely severe and lead to excessive non-monetary loss, the formula is:

personal injury compensation = (special damages x 10) + income lost

Once a final figure is calculated, the amount awarded to the claimant may be reduced if the personal injury was party their fault.

Types of Injuries and Compensation

Soft Tissue Injuries

The term soft tissue refers to the tendons, ligaments and the muscles in your body.  These injuries can result in a variety of diagnoses and prognoses by a medical professional.  They may include tears, sprains, strains and general soreness.  Even though these types of injuries are extremely common in an auto accident, they cannot be detected using x-rays.  Therefore, it is more difficult to detect these injuries quickly since they don’t manifest themselves right away.  The victim may experience persistent pain, swelling and inflammation.  The most common soft tissue injury is whiplash which often occurs as a result of a rear-end collision.  Symptoms may include neck pain, stiffness, headache, burning sensations, shoulder and back pain and dizziness.  Numbness or tingling in the arm, wrist, hands or fingers may be a sign of a pinched nerve.  Soft tissue injuries can often take longer to heal than a broken bone. 

Hard Injuries

Broken bones are considered hard injuries and are considered more serious than soft tissue injuries.  The more serious the break, the higher the value of your damage claim.  Serious fractures may require surgery, physical therapy, and long-term recovery.  In addition to the pain and suffering, bone injuries can lead to temporary or permanent disability.  That can create negative psychological effects, which may lead to anxiety and depression.

Nature and Duration of Medical Service

Treatment and Diagnosis of Injuries

Car accident injuries affect various parts of the body.  Head, neck and back injuries are certainly the most common, with whiplash topping the list.  Whiplash occurs when a victim’s head is violently hurled forward and then backward.  It can cause serious injury to the joints, discs, muscles, nerves, and ligaments of the neck and back.  Spinal cord back injuries can cause serious nerve damage resulting in paralysis or loss of feeling in certain areas of the body.  All of these injuries need to be assessed by a medical professional, who will use a variety of tests to determine the necessary treatment.  Some of these tests may include x-rays, CAT (computerized axial tomography) scans, or MRI (magnetic resonance imaging) scans.

However, auto accidents frequently affect internal organs and upper and lower limbs.  In order to detect the extent of injury, a medical professional will use CT scanning which combines special x-ray equipment with sophisticated computers to produce multiple images or pictures of the inside of the body.  CT scans of internal organs, bone, soft tissue and blood vessels provide greater clarity and reveal more details than regular x-rays.  Upper and lower limb injuries can include fractures to hands, arms, shoulders, forearms, fingers and wrists. 

Whatever the extent and seriousness of your injuries, always keep in mind that any treatment plan may only be a recommendation from your doctor.  In certain cases, you may want to get a second opinion or a more detailed diagnosis from a specialist.  Some doctors may prescribe physical therapy for a whiplash injury.  This can be a very long process and may not solve the problem.  In certain cases, if your body has become out of alignment, you may need to see a Chiropractor, who may be able to alleviate your pain and suffering much quicker.

The insurance company may want you to undergo an insurer’s medical assessment at the insurer’s expense.  Be very careful when agreeing to an independent medical examination.  After all, the insurance company is always seeking ways to save money on claims and these doctors may not have your best interests in mind.

Treatments by Therapist

There are many types of professional therapists.  Some of these include physical therapists, occupational therapists, and mental health therapists.

Physical therapists provide therapy services to patients with diagnoses that limit their ability to function normally.  They perform a comprehensive evaluation, which identify sensory-motor deficits.  With the results of those tests, they formulate a treatment plan in order to get you well.

Occupational therapists provide therapy to individuals diagnosed with functional limitations.  They assist patients in improving their ability to perform tasks in living and working environments.  They work with individuals who suffer from a mentally, physically, developmentally, or emotionally disabling condition.  They help patients perform a variety of activities from using a computer to caring for daily needs such as dressing, cooking, and eating.  People with permanent disabilities may require the use of adaptive equipment such as wheelchairs, or computer-aided equipment.

Mental health therapists come in a variety of disciplines.  They can range from therapists, to psychologists and psychiatrists.  No matter what type of personal injury you sustained, seeking treatment from a licensed mental health professional will help you deal with this traumatic event.  Victims of auto accidents often report feelings of anxiety and depression.  They may have become physically disabled and are experiencing a loss of physical mobility, cognitive ability and job loss.  All of these can lead to severe depression, which may be treated with a variety of therapies.

Duration of Treatment

The severity of the injury and how well the patient adheres to the treatment plan will all play a role in their ability to get better.  Timely evaluation and treatment may be the key factors in determining the prognosis of the patient.  The longer the wait to start treatment, the greater the chance of developing a chronic condition which becomes more difficult to manage.

Pain and Suffering

 

Medication

When seeking a diagnosis from a medical professional, they often times will prescribe medications to relieve your pain.  The fact that you were prescribed either over-the-counter medication to relieve pain, inflammation or other injury symptoms, this will help convince the insurance company that your injuries were serious.  The more powerful the medication and the longer it’s prescribed for, the greater the value your claim may be.

Accident victims on pain medication are more likely to settle their case.  The insurance companies use this to their advantage.  It’s advised that you don’t make hasty decisions while on pain relief medication. 

Keep proof of all of your medical expenses and prescriptions related to your injuries.  These expenses can be recovered. 

Length of Recovery

The length of time it takes you to recover from your injuries will depend on a variety of factors.  These can include the severity of your injuries; your age may be a factor, and if you were already suffering from a previous injury.  The longer your recovery period, the greater your claim for pain and suffering can be in obtaining a higher settlement.

Get everything in writing.  Your doctor needs to outline a treatment plan, clearly stating how long it will take before you can return to your routine activities, which includes employment.  This is the best way for the insurance company to calculate your loss of income.

It is extremely important that you continue to seek medical treatment on a regular basis.  If you miss doctor appointments, this may send a signal to the insurance company that suggests that you weren’t really hurt.

Permanent Injury

An accident can change your entire life and future.  It can leave you with severe and possibly permanent injuries.  Some of these include traumatic brain injury, spinal cord injury, and loss of a limb, loss of mobility or functionality, severe burns, eye injuries and disabling knee, hip or shoulder injuries.

Permanent injuries may include scars, which can have a lasting effect on your emotional well-being and self-esteem.  This could lead to anxiety and depression in which treatment may last years or be permanent in certain cases.

Injuries that cause permanent physical impairment often require significant medical treatment.  They can have serious, long-term effects on the victim’s life and may render them permanently disabled, in significant pain, and may even shorten their lifespan.

Physical and Emotional Distress

Some people never get over a traumatic or life-changing event.  They continually recall the tragic events or experience nightmares.  Many victims can no longer work or enjoy their favorite activities and everyday life may seem challenging.

The U.S. Supreme Court has described emotional distress as “mental or emotional harm such as fright or anxiety, not directly brought about by physical injury, but that may manifest itself in physical symptoms”.  Claims arising out of a physical attack, defamation, or invasion of privacy may be included as damages for mental suffering.

Emotional distress damages should compensate the plaintiff for his or her mental suffering.  The extent of your recovery for emotional distress is generally limited by the amount of damage you suffer and the severity of distress inflicted.  There are two types of emotional distress lawsuits; negligent infliction of emotional distress, and intentional infliction of emotional distress.  Negligent infliction is defined as acting negligently or not acting in a way that causes someone to endure emotional pain.  You must be able to establish a clear connection between the wrongdoer’s conduct and the emotional distress.  The distress must stem from a physical injury or be so egregious that it results in physical symptoms.  Intentional infliction means that the wrongdoer’s conduct was reckless or intentional.  Their conduct must be deemed as outrageous and intolerable and the emotional distress must be severe.

Some states are still split on whether there must be physical manifestation of the emotional distress in order for the claimant to successfully recover.  Some states require it, while others allow recovery for purely emotional distress.

Lost Income Reimbursement

 

If you miss work due to an accident, you are entitled to recover your lost wages.  You are also entitled to recover lost wages for time that you miss due to treatment of your injuries.  Using up sick leave or vacation pay is considered the same as losing the pay itself since you would have been entitled to use the vacation time or sick leave at another time of your choice. 

If you are self-employed, it may be more difficult to be compensated for your loss of net earnings.  A forensic economist may be required to consult on your case.  They are specialists in determining economic losses, which may include loss of earning capacity, lost profits, lost business opportunities and loss of good will.  You may have to provide your tax returns from several years back to look for a pattern in your income.  Lost income reimbursement can be proven through tax returns, so it’s a good idea to keep accurate records of your past income.

Loss of enjoyment of life is handled in a similar, yet slightly different, manner than pain and suffering.  Compensation for pain and suffering is the settlement for pain the victim has sustained.  In loss of enjoyment of life, it is for the limitations that injuries cause as a result of the accident.  This is a form of damage an injury victim should receive compensation for which entails all physical and emotional consequences of their injuries brought about by the accident.  Some of these examples may include:

  • Poor or ill health
  • Severe disability due to the loss of a limb
  • Loss of one or more of the senses (such as loss of eyesight or hearing)
  • Inability to engage in sports and recreational activities
  • Inability to participate in vocational activities
  • Lost interest in social activities

Damages due to physical disabilities and loss of enjoyment of life are claims, which are not easy to determine when establishing a monetary recovery amount.  There is no formula that can be used to determine a fair value for disability and loss of enjoyment of life.  The determining factor is the degree to which the injuries have had a negative impact on the injured person’s life.’’

When filing your personal injury claim, you may be able to claim the cost of unused airline tickets or concert tickets if your injury prevents you from being able to use them.  If you have prepaid for an entire vacation package and cannot reschedule for a future time, you can include the cost of this as well.

Property Damage Claims

The insurance companies will treat your property damage claim and your personal injury claims as two separate claims.  A claim for property damage may include the damage to your vehicle or other property.  The law in most states is that the victim is entitled to either the cost of repairing the vehicle, or the fair market value of the car if it is categorized as a total loss.  A car is considered totaled if the repair costs exceed a certain percentage of the cars’ value, usually ranging from 51% to 90%.  When an insurance company categorizes the vehicle as a complete loss, the insured party is paid cash value for the vehicle.  The actual cash value (ACV) is the cost to replace the vehicle with one that is of a similar kind.  Then they subtract an amount for age and normal wear and tear.  Unfortunately, most states do not require payment of replacement value.

If you have property damage liability, this pays for the damages to the other vehicle as well as the possessions of the other party when an accident is your fault.  It also covers property that was damaged in the accident, which may include a house, tree, fence, a garage door; basically anything that is considered property.

Third Party Claims

There are two types of claims.  A first party claim is one that you file with your own insurance carrier.  Claims against other drivers involved in the accident are often referred to as “third party claims”.  The other driver must be found legally responsible for the accident in order to file a third party claim.  The insurance company of the other driver will investigate the claim and make a decision as to whether they will pay the claim, negotiate or defend their insured party against the claim.

A third party may also include the manufacturer of a defective product, a property owner who failed to maintain a safe workplace, or the owner of an animal who injured someone.

Collision Coverage Claim

Collision coverage provides for the repair or replacement of your vehicle, regardless of if you are at fault or not.  Typically, this coverage is the most expensive type of auto insurance.  The insurance company will usually give you the actual cash value of your car and not the amount that may be necessary to replace your car.  If you have an older car, which doesn’t have a high actual value, it may not be worth purchasing collision coverage.

When making a decision about filing a claim with your insurance company, you may want to consider whether the cost of repairs will be less than your deductible.  If there is only minor damage to your vehicle and there were no others involved in the accident, you may opt to pay for the repair yourself.

Repair Amount Compensation

Generally, insurance companies assign their direct repair shop to make an assessment of the damage to your vehicle.  You also have the right to select a repair shop which will do quality work without the interference of the insurer.  You are entitled to a written estimate for the repairs.  Once you authorize the repairs to begin, the auto repair facility may not charge you more than 10% above the estimated costs without your prior approval. 

Your policy may also cover the cost of a rental car to use while your vehicle is undergoing repairs.

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