Bodily Injury Liability

How Do Insurers Value an Injury Claim?

It is very important to know how bodily injury liability insurance works. Determining the exact value of your claim can be quite difficult. The amount is mostly determined based on your specific circumstances. This article highlights some of the most critical things that insurance companies consider before compensating an injury claim.

Bodily Injury Liability


What Insurance Companies Should Compensate

To find out the value of your claim, it is crucial at first to know the kind of damages that should be compensated. Normally, if someone is liable for an accident, his/her liability insurance company should compensate an injured person for:
All expenses incurred during the treatment process.

Income lost due to the accident, because of time lost when undergoing treatment or unable to work.
Any permanent disfigurement of physical injury.
Loss of family, educational, and social experience. This includes missed training or school, recreation or vocation, or a special occasion.

Emotional damages, such as stress, depression, embarrassment, or difficulties in family relationships – for instance, anxiety due to the accident, the inability to cater for your family needs, or interference with sexual performances.
Damaged assets.

Damages Formula of the Insurance Company

When figuring out compensation, you can simply add up the cash spent and money lost. However, there is no way to calculate the price of pain or suffering or other lost or missed opportunities. This is where the damages formula of an insurance company comes in.

When starting the claim negotiations, an insurance adjuster should add up the total medical expenses that are associated with the injury. These expensed are called “specials” or “medical special damages.” This represents the base figure that the adjuster uses to calculate how much to pay an injured person for suffering, pain, and other losses that cannot be monetized (general damages).

If the injuries are comparatively minor, the adjuster multiplies the specials with 1.5 or 2. However, if the injuries are major, serious, ore permanent, the adjuster multiplies special damages by up to 5. In extreme cases, the multiplier can be as high as 10.

The adjuster will then add up any losses on income caused by the injuries.
That’s all about the damages formula of an insurance company.
However, the figure derived by multiplying medical specials by between 1.5 and 5, the added to income losses doesn’t represent the final compensation amount. It is simply an amount from which negotiations start.

Percentage of Fault

The extent at which each person is at fault significantly affects the amount an insurance company should pay. The damages formula only gives an estimate of how much your injuries are worth. By factoring in the question of your fault, you can get to know the actual compensation value of your claim. That’s when you can tell the amount an insurance company should pay.

It can be difficult to determine the fault for an accident. However, you and an insurance adjuster should come up with an idea of whether an insured person is at fault and to what extent. Depending on the fault, the percentage will be deducted to arrive at a final figure.