In an effort to help our clients understand the process of negotiating a personal injury claim, I have compiled the following information that I feel is important you understand once the medical bills, lost wage statements and any other “special” damages have been obtained and the negotiating process has begun.
There are basically two types of damages to be considered when evaluating your claim, special damages and general damages:
a. Special damages are those damages for which you can show a dollar amount that you incurred as a result of having to pay money or losing money as a result of the collision and your injuries. Examples of special damages are medical bills and lost wages.
b. General damages are the damages for which you do not have a bill or for which you cannot show any “tangible” loss. Examples of general damages are pain and suffering.
2. Insurance companies tend to believe that a person could not have been seriously injured unless the automobile the person was in suffered a great deal of damage or was totaled. The insurance adjuster usually will not believe that you were severely injured if the automobile you were in suffered only a few hundred dollars damage and was driven from the scene of the collision.
3. Insurance companies rate special damages, like medical bills and lost wages, much higher than complaints of pain and suffering. Insurance companies are primarily moved by facts, figures and documentation of money loses and cost of medical treatment. Whether right or wrong, insurance companies simply do not believe someone is suffering from severe injuries unless the medical bills are substantial and the length of medical treatment as well as method of treatment and medical reports from the doctor indicate the seriousness of the injury.
EXAMPLE: Mr. Johnson and Mr. Taylor are passengers in an automobile that is struck by another automobile that has run a red light. There is no contest of liability by the insurance company, and the automobile in which Mr. Johnson and Mr. Taylor were passengers is “totaled” giving rise to a reasonable expectation that anyone in the automobile may be severely injured. Mr. Johnson and Mr. Taylor are the same age and weight, work for the same employer and suffered approximately the same injuries.
Mr. Johnson’s Case: Mr. Johnson saw a medical doctor who prescribed nine weeks of physical therapy. He took about ten weeks to recover from his injuries and missed work for eight weeks. His medical bills were a little over $6,000.00 and his lost wages were $2,200.00. It took Mr. Johnson about nine months to fully recover from his injuries. Now he has absolutely no problems from the collision.
Mr. Taylor’s Case: Mr. Taylor went to the emergency room. The emergency room doctor told him to see a neurosurgeon and an orthopedic specialist and provided Mr. Taylor with a referral to each. Instead of following the emergency room doctor’s advice, Mr. Taylor went to the chiropractor five or six times. Because Mr. Taylor was determined not to miss work he lost only six days pay of approximately $350.00. His medical bills totaled approximately $600.00. Mr. Taylor still suffers considerable pain, is unable to get along with his family because he is grouchy all the time, cannot perform his work properly and has not been able to golf or bowl once or twice a week as he did before the collision. His friends and relatives have written many letters explaining how the collision has changed his life and the considerable pain he continues to suffer.
POSSIBLE RESULT: The insurance company will probably settle Mr. Johnson’s claim for approximately $13,000.00 or a little more, but will offer Mr. Taylor no more than $2,500.00 if he is lucky. Why? Insurance adjusters want to see documentation and bills.
4. Insurance companies are not afraid of being sued in small personal injury cases. The cost to the insurance company of defending these claims usually will not be very high compared to the low risk to the insurance company of you obtaining a large jury verdict. An insurance company would rather not pay $8,000.00 to defend a claim worth $10,000.00 but will do so if it has to. If there are liability questions some insurance companies will pay $10,000.00 to defend a case that you would have settle for $3,000.00.
5. Persons who settle their cases without filing a lawsuit may always have second thoughts but may be happier than persons who go to trial or file suit and then
settle at the courthouse steps on the eve of trial. You may doubt the adequacy of any settlement but the emotional strain and difficulty of going through a lawsuit, waiting two to three years for trial and wondering if the jury will award you anything are seldom worth the few thousand dollars a jury verdict may bring.
The above information has been provided to help you understand how insurance companies evaluate personal injury claims. If your case is one in which the specials exceed $10,000.00, it is likely that that it will be necessary to file suit on your behalf to obtain for you a reasonable recovery. However, if the liability is not contested, your special damages are well documented and there is sufficient insurance coverage, your case also may be settled before filing suit.For more information, please contact us for a complimentary consultation.