Taking a case all the way to trial can be very costly for all parties involved and the award of damages can be quite unpredictable because of the difficulty in estimating the value of your claim.

A pretrial settlement can be a good strategy to avoid the uncertainties of trial. Pretrial settlements are particularly common in automobile accident cases involving insurance companies which determine the value of cases based on several factors.

How Do Insurance Companies Decide The Value Of Automobile Cases?

Car accidents are quite common and result in thousands of claims throughout the year against the different insurance companies. With a long history of responding to claims, insurance companies have compiled significant data based on these accidents and payouts which help them formulate standards for settling future cases.

Ultimately, cases are settled based on the unique facts in the case, but there is some predictability in the information that insurance companies consider in valuing your claims.

They use a formula that assesses your specific damages (financial loss) and general damages and then multiply that loss by a certain numerical factor they have identified based on their statistics. This means that your actual financial losses can represent only a portion of what the insurance company ultimately may determine is the value of your claim.

What are Some Common Damages Claimed in Automobile Accident Cases?

The types of damages in cases involving car accidents are pretty standard. The most common are called special damages, which include medical expenses, and general damages, which include claims for emotional distress and pain and suffering.

Some of these non-specific damages are quite hard to quantify which can make it difficult for you to prove your claim. Insurance companies will take all of this into consideration when determining how much to pay out to you.

What are Special Damages in an Automobile Accident Case?

Special damages, otherwise called economic damages, relate to the plaintiff’s actual out-of-pocket costs. These are concrete damages that can be quantified and verified by supporting documentation. Examples of special damages include medical expenses and lost wages.

What are General Damages in an Automobile Accident Case?

In contrast to special damages, general damages are not so easily quantified and proven. Subjective in nature, they include claims for pain and suffering, emotional distress, future medical monitoring, disfigurement, and loss of consortium.

How Do You Prove Medical Expenses After an Automobile Accident?

You can obtain damages for specific medical bills relating to reasonably incurred costs for treatment in connection with a defendant’s negligence in an automobile accident. In order to prove your legitimate medical expenses, you should present copies of your medical bills.

A qualified expert witness can testify about the reasonableness of the cost of the medical expenses and that the medical treatment stemmed from the automobile accident.

How are Multipliers Used in an Automobile Accident?

The insurance company has determined your specific losses based on your supporting documentation. They will now multiply that number by a certain numerical factor (usually between one and five) to determine what the final value of your claim is in their opinion.

There are no absolute factors that the insurance company will consider in determining how much to multiply your claim by. Rather, that is determined based on the facts of your particular case. However, these are the most common factors used by the insurance company:

  • How much are your total medical bills?
  • Was the medical treatment necessary?
  • Did you seek treatment for a condition pre-existing the accident?
  • Did you seek long-term treatment for your injuries?
  • Did your actions play any part in the accident?

Let’s say you were injured in a car accident but did not see your doctor until the following week or you only had one or two doctor’s visit as a result of the accident. You did not lose any time from work and your total medical bills was less than $3,000.

If the insurance carrier decided to multiply your actual losses, it might do so by a lower factor, perhaps by a factor of two. Your claim might now be $6,000 instead of $3,000. These facts suggests that it is unlikely the insurance company would multiply your actual damages by a factor greater than two.

If the circumstances surrounding the accident showed that you were immediately treated at a hospital and that you incurred medical bills of $10,000, the insurance company may decide to use a greater multiplier in your case, and instead of $10,000, you may end up with $25,000.

The important thing to keep in mind is that the unique facts of each case will dictate how the insurance company estimates the final value of your claim.

Should I Meet With an Attorney If I was in an Automobile Accident?

Dealing with an insurance company following an accident can be quite stressful. While it is possible to navigate the situation on your own, there might be circumstances which complicate the situation.

Consulting with a local personal injury attorney may help you understand your rights and what you are entitled to if you have been injured in an automobile accident.