Do Insurance Adjusters Use Settlement Formulas?

Many different aspects of a victim’s injuries determine the amount of money that he or she might obtain in the way of compensation. Working for the insurance company, the adjuster makes that determination. Hence, that adjuster has to put a numerical value on both those aspects that can be quantified and those that are more qualitative in nature. For that reason, most adjusters will use some variation of a settlement formula, when arriving at one specific figure.
The adjuster’s calculations do not yield a number that represents the size of the victim’s awarded compensation. Rather, those calculations provide the insurance company with the amount that will be suggested to the victim/policy holder at the start of negotiations. That starting figure has been calculated by using a formula.

What is the nature of that particular formula?

Victims and adjusters agree that the amount of money awarded to someone that has been injured in an accident should reflect the nature of the victim’s injuries and the extent of damages suffered. Typically, adjusters are given a list of all the medical bills that have been sent to the victim. Once the adjuster has summed up the totals on each bill, the resulting figure is called special medical damages.
In most cases, the special medical damages get multiplied by a number between 1.5 and 5. If the victim’s injuries are quite serious and appear to be long-lasting then the special medical damages might be multiplied by a number as high as 10. The resulting product is called the general damages; it puts a numerical value on the victim’s pain and suffering.
The quantities that represent two different types of damage get added to the value of the victim’s lost income and the cash value of the property damage. If the victim has been in a car accident, the value of the damaged automobile usually corresponds with the property damage. Once all those numbers have been added up, the insurance company has the figure that will be used at the start of negotiations. It is best to consult with a personal injury lawyer in Vaughan.

How do adjusters create variations of that formula?

As indicated earlier, an adjuster’s variation might reflect the fact that the amount of pain and suffering represents a quantity that is larger than 5 times the medical special damages. By the same token, an adjuster’s variation might indicate that the amount of the victim’s pain and suffering amounts to almost nothing. In that case the “1.5” would be replaced by a number that is much less than one.
Adjusters also make changes when determining what constitutes property damage. As stated, vehicle damage is the most important consideration in a case that concerns a car accident. Suppose, though, that an adjuster’s attention needs to be focused on a slip and fall incident. In that case, certain items that had been worn or carried by the victim might have been damaged.

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