No amount of money can ever make up for the pain, emotional distress, and time that you’ve lost as a result of an accident.
An insurance claim can feel like an extra job when you factor in the time and energy you put into dealing with every aspect of your case. Much of this time is spent on the phone with your insurance company, the other driver’s insurance, and anyone else involved in your case.
If you’re dealing with a claim on your own, the process can be draining. Surely, you want to be recognized for everything that you’ve gone through and receive a fair settlement.
In this post, we will discuss the factors that determine the value of an auto accident settlement and what to expect.
Who Pays for your Settlement Award?
If the at-fault party’s insurance company accepts liability, the coverages for that policy pay for your damages and medical bills.
On the other hand, if liability is disputed or it’s determined you were at fault, your insurance company has to cover your losses. However, you’re only covered if you have the appropriate coverages, such as collision and medical payments coverage. If you only have liability, your policy does not cover your own property damage and injuries. It only applies to damages and injuries to other drivers.
Using your car insurance can speed up your car repairs and help you pay for medical expenses while you wait for the other insurance company to accept responsibility. Your insurance carrier will request to be reimbursed for anything they paid out to you.
About Insurance Policy Coverages in California
Having insurance coverage is not just the law, but it also protects you when you find yourself on either side of an accident. Getting caught uninsured can mean financial ruin if you ever get sued.
The law in California requires all vehicle owners and drivers to show evidence of financial responsibility by providing one of the following:
- Proof of minimum insurance liability coverage
- A deposit or surety bond in the amount for $35,000
- An insurance certificate issued by the DMV
At a minimum, California drivers are required to carry coverage options for property damage and bodily injury.
Liability coverage can be purchased for different amounts, but the minimum policy limits in California are $15,000/$30,000/$5,000.
$15,000 = Bodily injury per person
$30,000 = Per accident
$5,000 = Property damage
This means a driver’s policy can pay for up to $15,000 in bodily injury for a single individual and up to $30,000 for an entire accident.
For example, if there is more than one person injured and the combined total for both injury claims is $25,000, a $30,000 policy has enough to pay out both claims. On the other hand, if all injury claims go over that maximum amount, the policyholder is responsible for the difference. The same concept applies to property damage claims.
Vehicle owners may have larger insurance policies that cover much more than the state’s minimum requirements. It is usually recommended that those with newer cars and more assets carry larger policies.
The Amount on the Insurance Policy Matters
An insurance company can only pay out its policy limits. Excess amounts are the responsibility of the at-fault driver and owner.
If the value of your claim exceeds the other driver’s policy, your insurance company may look for additional funding sources, such as other insurance policies that can cover the difference. Attorneys can also run asset checks on uninsured motorists and vehicle owners. Just because the insurance company pays out the maximum does not clear its policyholder from being accountable for someone else’s injuries or death.
The Car Accident Settlement Process
Before your attorney can begin negotiations, liability has to be determined. During the investigation, adjusters will take statements from drivers and witnesses, assess vehicle damages, and look at police reports. There may be additional activities that an insurance adjuster may do, such as obtain scene photos and canvas for witnesses. But generally speaking, all accident investigations follow a similar pattern.
Once liability is clear, an accident lawyer can initiate the negotiation process. However, this can only begin after the client has completed all medical treatment and received all of the bills.
How do You Place a Monetary Value on a Personal Injury Claim?
There is no clear-cut formula to determine how much a person deserves to receive for their claim. But there are specific considerations that insurance adjusters will look at when figuring out a payout amount.
When we refer to the value of a personal injury claim, we mean everything related to the victim’s injuries, including medical bills, lost wages, and other non-tangible items.
Personal injury does not include paying for your car damages and rental. This falls under property damage.
Medical Bills and Lost Wages
The first thing insurance companies will analyze is the total amount of your medical bills. They will also review the type of treatment you sought for your injuries and determine whether it was consistent and reasonable for the types of injuries you sustained.
If you missed time from work, you would have a claim for lost wages or loss of income. To prove your claim, you can submit pay stubs that show how much you get paid for your work. Your employer may also have a record for all the days you missed. From both your employment and medical records, you can match the dates to prove the reason you missed work and lost income.
Time, Emotional Distress, Pain, and Other Non-Tangible Items
Tangible items can be calculated and totaled up to get a final amount. But, they do not take into account non-tangibles, like pain and suffering. For example, let’s say the total amount for medical bills and lost wages is equal to $6,500.
This number excludes physical pain, sleepless nights, worrying, depression, and other things that cannot be measured. So how do you put a value on non-tangible items?
Some insurance companies may use a method known as a “multiplier,” which can range anywhere between 1.5 to 5.
From our example of medical bills and lost wages that total $6,500, if we use a multiplier of 2, the total value would equal to $13,000. This amount would cover the cost of your bills, lost wages, and non-tangibles.
But before you begin to use the multiplier formula, remember that it will always depend on a case by case basis. Everything has to be reasonable, and there should be enough strong evidence to support the amount of money that you are requesting.
Some insurance companies may not even apply a “multiplier” formula. They may use their own methods or judgment.
The evidence you provide and your negotiation skills are the things that will have the most significant impact on the final amount on your check. For this reason, it’s crucial that you never try to settle an accident claim on your own. Let an experienced attorney with strong negotiation skills handle your case and get you what you deserve.
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