The insurance company must cover the compensable damages that have resulted from an accident that has triggered the submission of a personal injury claim. Some of those damages, such as the medical bills and lost wages should be easy to calculate. Other damages, such as the victim’s pain and suffering could prove harder to calculate.
Insurers use a special formula, in order to calculate the value of a claimant’s pain and suffering.
The first part of the formula calls for performance of a multiplication operation. One of the 2 factors that must be used in the multiplication operation should represent the total for all of the victim’s medical bills. The other figure/factor is called a multiplier. The size of the multiplier should reflect the nature and extent of the claimant’s injury.
For claimants with only minor injuries, an adjuster would probably select a 1.5 as the proper multiplier. For claimants with catastrophic injuries, an adjuster would have good reason for picking a number of 5 or more as the multiplier.
By selecting and using a multiplier, adjusters have the ability to link the information on the claimant’s mental and emotional problems, along with any reported pain, to a given number. In other words, the adjusters can get one step closer to calculating the value of a personal injury claim.
What would be the next step? That would involve adding to the product from the multiplication operation the figure that corresponds to the reported lost wages for the claimant. That sum would represent the calculated value for the submitted personal injury claim, as per personal injury lawyer in Lethbridge.
Does the formula tell the insurer how much money the insurance company must pay to the claimant?
No, the formula only provides the adjuster with a figure to be used at the start of negotiations. That figure could be greater than what the insurer must pay to the victim/claimant. It could be that the same victim had made contributed in some way to creation of the accident, or creation of the accident-linked injury.
Once the extent of that contribution has been determined, then that information should be used to determine how much money the defendant’s insurance company must hand to the claimant, in the form of compensation. The size of that payment should be a given percent of the number that represented the injury’s calculated value.
If the victim/claimant had contributed 25% of the factors that caused the accident, then the compensation would equal 75% of the amount agreed to at the close of negotiations. If the victim/claimant had contributed only 10% of those factors, then the necessary compensation would be 90% of the amount of money that both parties had agreed to at the end of negotiations.