Formulas Used by Adjusters to Value a Claim

Monday, October 27th, 2014

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Tacoma personal injury lawyerOnce upon a time, insurance adjusters used to add up a person’s medical bills, multiply them by three and add the claimant’s lost income. This describes the method used to arrive at a settlement offer for a typical case involving a soft tissue injury, says a Tacoma personal injury lawyer. For instance, a case involving a soft tissue injury with medical expenses of $4200 with a loss of earnings of $500 would result in a settlement offer around $13,000. The “times three” method of valuating a personal injury case was not the only method used by adjusters to come up with a settlement offer, but it served as a general guideline.

Computer programs for Case Valuation

As with many industries, insurance companies now use computer programs to arrive at a value for a case, according to a Tacoma personal injury lawyer. The older method of multiplying medical bills three times has been discarded. In most cases, the adjuster will tell a claimant that no formulas are used to evaluate a claim, that each case is unique; however, this is not likely to be the truth. In most situations, the insurer will evaluate the medical bills using a computer program and might then reduce the bills by one third. Using the earlier example, a bill of $4200 would be reduced to $2800. Instead of multiplying by three, the bills would now be multiplied by two. Under this new formula the settlement offer would be just $6100, or less than half.

Difficult to Get a Fair Settlement

This new, computerized method for evaluating personal injury claims makes it more difficult to settle cases. The insurer is making the assumption that a lawyer will be able to negotiate with the medical providers and other debtors to get a price reduction. This is difficult, if not impossible. Once the bills and the fees for the personal injury lawyer are paid, there may be very little money left for the claimant. The effect of these low settlement offers is that many cases that in the past would have settled out of court, now must be litigated. Another effect is that the claimant suffers an unfair outcome if, for example, an attorney reviews the case and sees that it is not economically feasible to proceed, then withdraws from the case

A Tacoma personal injury lawyer may be able to either negotiate with the insurer or litigate the case to get a fair settlement on behalf of someone who has been injured in an accident. To speak with a Tacoma personal injury attorney about your personal injury case, call the offices of Greene & Lloyd, PLLC at (253) 770-0808.


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