Expert: Claims Guy - 6/7/2009

Question
You are currently an Auto Claims Manager. It should be proper for you to answer this question. In an auto accident personal injury case, how does the at-fault driver’s insurance evaluate the compensation, or how does the insurance make the offer to try settle the case? Can you explain it? Thank you.  

Answer
The claim rep will try to estimate what a judge or jury would award you if you filed a lawsuit againts the at fault driver and went to trial.  this is very subjective and 2 people will often come to different conclusions, but there are certain standards that everyone follows, so they shouldn't be too far off.

They will need to review your medical bills and records related to the accident.  If you had a prior similar problem in the past, they will want to see those records as well.  If you missed time from work because of the injury, they will need documentation of that, even if you were compensated by your employer.

The amount of your total settlement wil include reasonable and necessary medical expenses, lost wages, and a subjective amount for pain and suffering.  This is what a judge or jury would award.

They will consider how severe the impact was, the type of injury you sustained, and the length and type of treatment you received.  Some people over-treat and build up unnecessary medical bills so their claim is worth more.  They will be looking for this, so don't do it.

Broken bones and serious injuries are worth a lot more than muscle strains.  If the property damage was minor, they will have a hard time believing a serious injury occurred.

The whole thing is very subjective and based on opinion.

After they review all this, they will establish a range of value.  They will then make you an offer, and it will probably be on the low end of this range.  You will then make a counter-offer, probably on the high end of your range.  You will then negotiate to try to meet in the middle.  It usually take 3-4 back and forth offers before claims are settled.  Some take longer, some less.  Some are never settled and they go to trial.

Keep in mind that trials are very expensive for both sides, but more so for the plaintiff because most insurers use in-house counsel.

Good luck!