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How are Personal Injury Claims Valued?
When you suffer an injury in an accident, you have questions about how to be made whole. You may wonder how you can be compensated for your physical injuries in addition to the pain and suffering arising from the accident. Knowing what your personal injury case is worth will help you get the compensation you deserve.
The role of insurance companies is to put you in as good or better than before the accident. Insurers consider several factors when determining how to value personal injury claims.
Calculating Your Damages
The value of your claim depends on the damages you can seek for your losses. First, there is a distinction between damages involving financial loss and damages involving emotional loss. Special damages cover quantifiable economic loss and hardship. General damages have negative emotional and psychological consequences.
Special damages include:
- Expenses for medical care
- Loss of income
- Permanent disfigurement or permanent disability
- Property damage
General damages include:
- Pain and suffering
- Emotional distress
- Loss of consortium
- Loss of enjoyment
An Explanation of Special Damages
Below is some additional information about special damages that are common in injury claims.
Medical Care Expenses
Expenses for medical care include your current medical bills and projected costs for your future medical care.
Loss of Income
When determining the income loss, insurers calculate both the loss of current and future income. For example, if an injury prevents you from working, the loss of potential income is considered.
It is easier to calculate values on property damage since it is quantifiable. For example, insurers can determine the market value of a totaled car.
An Explanation of General Damages
The following general damages might come into play in cases involving serious injuries:
Pain and Suffering
The term “pain and suffering” refers to physical and emotional pain. You may have claims for pain during and after your recovery. For example, if an accident leaves you with chronic back pain and you are unable to sleep as a result.
Anxiety, depression, sleeplessness, or the ability to function normally because of your injuries give rise to a claim for emotional distress. Emotional distress generally applies when the injury or accident is severe.
Loss of Consortium
Loss of consortium refers to the effect the injuries interfere with your relationship with your spouse. If your injury prevents you from sexual activities or deprives you and your spouse of enjoying each other’s company, you may have a claim for loss of consortium.
Loss of Enjoyment
If your injury stops you from enjoying your hobbies or day-to-day activities, that is considered a loss of enjoyment. For example, if you were a marathon runner but your injury has affected your ability to run, you may receive compensation.
Permanent Disfigurement or Permanent Disability
Insurance companies set values based on permanent disfigurements such as a scar and permanent disabilities such as paralysis. The values depend on the type of long-lasting injury and how it impacts your life.
Formulating a Value for Personal Injury Claims
As previously stated, special damages have a quantifiable economic loss. Insurers calculate special damages based on tangible values and actuarial tables. Since general damages do not have a specific price tag, insurance companies use a mathematical formula for compensation. First, they total the amount of the special damages and multiply that number by a factor between 1.5 and 5. The more severe the injury, the larger the multiplier.
Of course, this is merely a ballpark number. It is helpful to have a lawyer put together a strong case and advocate on your behalf. Now that you understand how insurers value personal injury claims, don’t wait to seek compensation. Under California statute of limitations laws, you must bring actions for personal injury within 2 years. Don’t wait to speak with an experienced personal injury attorney about a possible case.