Any personal injury or car accident case can have many different facets. When it comes to determining the worth of damages, it may not always be straightforward for insurance companies to decide who gets what. Frequently, damages are immaterial, such as pain and suffering, loss of wages, or decreased quality of life. And if it can be difficult for insurance companies to determine, it can be even more confusing for those injured and awaiting restitution for damages. This may lead many to wonder, how insurance companies determine settlement amounts.
For more detailed information on this process, consider speaking with an experienced personal injury attorney from Stufano Law by calling (914) 752-7746.
Claims Adjusters
To understand what goes on behind the curtain, it is important to know who is behind it. The individual who will be evaluating and determining the value of a case is called a claims adjuster, or an insurance adjuster. This person, in a similar manner to an attorney, will want to collect all of the relevant facts and information to recreate a clear picture of the event.
This will allow the adjuster to understand who was involved in the incident, what property may have been damaged, and the ensuing consequences. These facts are crucial to the determination of settlement amounts offered by the insurance company.
Factors Involved in Settlement Amounts
Claims adjusters generally consider three factors when determining settlement amounts, liability, damages, and insurance coverage. These three factors work in unison to show who was at fault, the value of what was lost in the incident, and what provision the insurance company can offer as a result.
When the injured party files a claim against the insurance policy holder, the adjuster will then investigate to ensure that these claims are true and to what extent. They will determine if the insured party is liable for the damages, and will likely reject the claim if they are not.
After they have done this, they will determine the losses of the victim. This will generally include financial losses of property damage, the cost of any medical expenses, or even lost wages due to injury. Damages are determined by evaluating the evidence, including photos, videos, official reports, and witness statements.
There are also two kinds of damages that the adjuster will evaluate–special damages and general damages. Special damages are specifically monetary losses as a result of the incident, whereas general damages involve things like pain, suffering, and other non-monetary losses.
Lastly, once they have determined the type and extent of the damages, the claims adjuster will then determine if the insured party’s policy covers the type and extent of damages incurred. Insurance policies are complex things that offer different levels of coverage depending on the policyholder’s plan.
This may also apply to those who have experienced a car accident and may be wondering, “How do insurance companies determine settlement amounts?” In this case, an experienced motor vehicle accident lawyer from Stufano Law can help.
Process of Investigating and Negotiating a Claim
While the criteria may help one understand the question of how do insurance companies determine settlement amounts, there is still more to the process. Insurance claims adjusters have an in-depth process for evaluating claims and ensuring that the proper amounts are distributed to the right parties.
Investigating the Claim
When an injured party makes a claim against the policyholder, this is called a “third party” claim. In essence, the claimant is asking for compensation as a result of damages incurred by the policyholder. Naturally, the claims adjuster must ensure that the claim is legitimate.
They will first speak to the policyholder to ensure that the details of the claim are accurate, as well as consulting any police report or other documentation available. This supports the accuracy of the claim and allows the adjuster to make an informed decision.
Investigating the Claimant
Depending on the severity of the case, the claims adjuster will also investigate the claimant. According to the New York City Comptroller, this allows the insurance companies to offer an early settlement instead of resorting to a lawsuit. Most insurance companies will have a database that details whether or not an individual has filed for personal injury in the past. In some more extreme situations, claims adjusters may even hire a private investigator to ensure that the claimant is presenting their case honestly.
Gathering Documentation
After this, the claims adjuster will collect any relevant documentation of the accident. This may include medical bills, financial statements, proof of earnings, tax returns, and others. This documentation will help the adjuster determine if there is any falsehood in the claimant’s request.
By examining these documents, the claims adjuster will be able to determine what was a direct result of the incident and what may have been pre-existing. These variables will help determine the settlement amounts.
Determining Claim Value
When determining claim value, adjusters will evaluate the two categories of damages: special damages, which can be calculated in exact detail, and general damages, which cannot. For special damages, claims adjusters simply have to do the math to determine what is owed to the claimant.
However, when it comes to general damages, the process gets more difficult. Insurance companies generally have formulas they use to calculate these general damages, however, they are not required and generally do not share these formulas with the claimant.
First Offer and Negotiation
Once the claims adjuster has determined the value of the settlement, they will make a first offer to the claimant. Depending on the insurance company, this is where the claimant must be wary of low-ball offers.
Occasionally, insurance companies will start with an offer much lower than the actual value of the claim. This is intended to save money, but it can occasionally mean that claimants do not receive the proper compensation for damages. Having external legal counsel can help determine whether or not a settlement offer is fair, and can also assist in negotiating with the company for a more fair settlement.
Contact a New York Personal Injury Lawyer Today
The complexity of the process that claims adjusters go through still leads many to wonder, “How do insurance companies determine settlement amounts?” While for some, it may be an idle question, for those who have been injured and are seeking compensation, the answer can mean the difference between financial stability and instability. Understanding this complex process can help give claimants peace of mind while also ensuring fair compensation for victims of personal injury.
An experienced personal injury lawyer from Stufano Law can help navigate the insurance claims process and ensure fair compensation. For more information, consider scheduling a consultation by calling (914) 752-7746.
