How an Adjuster Makes a Personal Injury Settlement Offer
In a personal injury claim, a settlement offer is typically a lump sum amount provided to a claimant to resolve the outstanding issues. The settlement offer is prepared by an insurance adjuster, who works for an insurance company. The adjuster’s job is to figure out how much the insurance company needs to pay for the injuries and/or property damage resulting from the accident. The insurance adjuster will:
- Investigate the accident (to determine liability);
- Investigate the damages (to you, your vehicle, and any other property); and
- Make a calculation of the claim value which manages costs associated with your recovery.
How an adjuster determines the value of a settlement offer
An insurance adjuster determines the value of a settlement offer through a meticulous process that focuses on documentation of the accident and evidence of damages incurred, including the injuries in question. The adjuster will assess the entirety of the medical records available, including any documentation which may indicate prior conditions on your behalf.
In calculating the value of a settlement offer, the adjuster will differentiate between those calculable damages such as medical bills and lost earnings, without those damages which are discretionary, such as pain and suffering. In some cases, adjusters have been known to subtract the cost of certain medical bills, such as those invoiced from health care providers other than physicians and hospitals. For example, a plaintiff with $10,000 of medical bills, with the majority of which being chiropractic and physical therapy bills, might have the medical bill claim cut in half for valuation purposes by the adjuster, perhaps assuming that a portion was already recovered from a health insurance plan.
The factors considered in a claim include the following:
- The type of injury;
- The treatment obtained;
- The duration of symptoms;
- Any resulting side effects;
- Any pre-existing conditions;
- Any concurrent factors (e.g., major stress ot related to the injury);
- The inability to function in a housekeeping capacity, if any;
- Any difficulty with caregiving functions, where applicable;
- Lost income;
- The impact of the injuries on quality of life;
- Out of pocket expenses; and
- Care costs if any.
In determining the value of an award, a court judge would first determine the financial damages and then amounts for non-pecuniary damages (i.e., pain and suffering).
When preparing a settlement offer, the adjuster will compare the cost of the claim against the risk of legal action to the insurance company. In other words, the adjuster will consider what your chances would be at winning in a trial, and what amount the court might award you in deciding what to offer you. The settlement offer might not be reasonable until the adjuster becomes aware that you have legal representation and are prepared to take legal action.
Obligations of auto insurers
The Automobile Insurance Act (the “Act”) outlines requirements that automobile insurers must follow when they are defending a claim. For example, an insurer who accepts liability for a claim may make payments to the claimant based on information provided by the claimant (e.g., loss of income, loss of earning capacity, medical expenses) less allowable deductions, if any (e.g., less payments already received from another insurance plan). Also, the insurance company must inform the injured victim of receipt of the claim and the total amount that is to be paid with respect to the claim. Any failure to comply with provisions in the Act could result in costs against the auto insurer.
Do Not Sign a Settlement Offer without Knowing Your Rights
It is important not to sign documentation with the insurer without first consulting with a lawyer, as your case will most likely be over once you accept the settlement offer. The Newfoundland and Labrador Supreme Court has held that an accepted release or settlement is final. Meaning, without significant evidence of coercion or dominance, the courts will always uphold a settlement, even if your injuries or medical bills increase following the acceptance of the offer.
Speak to a Personal Injury Lawyer
We recommend that you get information about your legal rights and options by speaking with an experienced personal injury lawyer in St. John’s, Newfoundland. Your interests are best served when we represent you from the beginning, but we can also assist you if your claim has already progressed. At Gittens & Associates, we assess whether or not the settlement offer is appropriate for your case.
Keep in mind that the value of an injury immediately after an accident may be different from the long term value. In other words, it is better to wait until there is some understanding of the severity and prognosis of the injury and the actual duration of recovery (or lack thereof) before negotiating with the insurance company.
Gittens & Associates can help you
For a free telephone legal consultation in Newfoundland, contact our experienced personal injury lawyers. At Gittens & Associates, we have your personal injury in mind when dealing with the insurance company. We know what elements of your claim to prioritize and how to protect your interests so you will get the best settlement you can for your injuries. Call us today at 1-888-592-7171.