When another driver injures you in a Dallas car crash, you expect a car accident settlement…eventually. In the meantime, you must brace yourself for ongoing physical, psychological, and financial losses. Serious injuries require costly hospitalizations and follow-up treatment. You pay for medication, household assistance, and rehabilitation services. You suffer due to pain, anxiety, and emotional trauma. If you can’t do your job, income losses worsen your growing financial concerns.
By the time you reach maximum recovery, you’re ready for answers. You want to know how and when you can expect a settlement offer. You also want to know how the liability insurance company plans to calculate your car accident settlement.
How Do Insurance Companies Determine a Car Accident Settlement?
If you talk to five different insurers about settlement calculations, you will hear five unique strategies for evaluating injury claims. In Texas, the Civil Practice and Remedies Code Title 2, C, § 41 defines the types of recoverable damages. Most settlements include two broad damage categories: economic and non-economic. Under certain circumstances, you may qualify for a punitive damage award.
Economic damages are relatively easy to calculate. An insurer simply adds up all of the financial losses you incurred during treatment and recovery. These often include:
- Medical: hospitalization, physician treatment, rehabilitation, physical therapy, surgery, alternative treatments, and other professional medical services
- Medication: oral or topical medication a doctor prescribes
- Medical devices and structures: braces, supports, wheelchair ramps, and other devices
- Lost income: current and future wages or salary you lost or will lose due to temporary or permanent disabilities
This is the most controversial portion of any car accident settlement. It requires negotiating parties to agree on a value for issues that have no objective measures. These damages often involve:
- Non-visible and psychological issues: pain, suffering, anxiety, stress, PTSD, emotional distress
- Loss of consortium: damages payable in Texas based on the diminishment of a family’s relationship due to accidental injuries, such as services, social interactions, intimate relationships, parental activities, etc.
- Permanent impairments and scarring: damages based on the injured person’s perception of how a scar or other permanency affects them
If a case goes to trial, a Dallas County judge or jury can award exemplary damages to punish the defendant. A plaintiff must show, by “…clear and convincing evidence…,” that the defendant’s actions constituted fraud, malice, or gross negligence in order for punitive damages to be awarded.
No Two Injuries Are the Same
When a liability insurer calculates your car accident settlement, they should consider that even identical injuries affect different people in different ways. Recovery difficulties, pain, psychological trauma, and other aspects vary from person to person. Age, physical condition, and overall health become key factors in damage extent and recovery. Some people find pain unendurable, while others experience minimal discomfort.
Some insurers do calculate injury compensation by considering how an injury affected each victim. Others use generic injury evaluation strategies.
- Experience: Seasoned adjusters often rely on past experience when evaluating personal injuries. Also, when they interact with the injured person during their recovery, they get an idea as to what it would take to resolve their claim.
- Formulas: Some insurers calculate car accident settlements using a formula. They add all medical expenses and multiply the total by three or another random factor, usually between 1.5 and 5. Some insurers reduce the claim’s settlement value by deducting the cost of diagnostics and testing before applying their factor. To an injured victim who wants an adjuster’s settlement calculations to make sense, this method can seem reasonable and logical.
- Claim Evaluation Software: Some insurers calculate car accident settlements with claim evaluation software. A claim representative inputs the injured person’s data, and then the software calculates the claim value. Like random factor calculations, this is a canned approach. It eliminates the human element that’s essential when evaluating human conditions.
Car accident attorneys use a more methodical approach when they calculate a car accident settlement range. They look at all aspects of your injuries, treatment, and recovery to understand how they affected your life. They learn about your experiences with pain, suffering, and other non-physical issues. Attorneys consider your economic and non-economic damages. Before establishing a settlement range, they research prior settlements and recent court awards.
Settlement Negotiations Sometimes Stall
Since attorneys, insurance companies, and injured victims use vastly different settlement calculation strategies, negotiations often break down. When adverse parties can’t resolve their differences through negotiation, litigation becomes the next step. When you file a lawsuit, it places your case and settlement within the court’s authority. Before moving your case forward, a judge usually requires that you mediate your claim.
Mediation is a form of alternative dispute resolution. A trained mediator conducts a facilitated negotiation session. Insurers, injured parties, and attorneys must participate. They meet, share information, and attempt to resolve a case. This process doesn’t always produce a settlement, but it encourages cooperation and further negotiation.
Texas Civil Practices and Remedies Code Title 7 §154 encourages mediation to resolve litigated cases. Under Dallas County Civil Court Rules, mediation is not optional. Judges expect both parties to participate and negotiate in good faith.
Settlements Are Usually More About Compromise Than Calculations
Neither insurers, attorneys, injured victims, nor claim-evaluation software can calculate a settlement with 100% certainty. As most relevant parties determine injury values in completely different ways, their valuations often remain far apart. In the end, it’s all about compromise. As most injury cases rarely go to trial, the parties eventually negotiate a settlement. For those cases that go to court, a judge or jury decides the settlement amount.
Do You Need an Attorney to Handle Your Car Accident Settlement?
If you’re seriously injured in a car accident, you should never handle your case on your own. When you contact a personal injury law firm as soon as possible after your accident, they protect your legal rights while you recover from your injuries.
Attorneys evaluate legal and damage issues. They deal with negligent drivers, their insurers, and their lawyers. When you’re ready to settle, they negotiate the best compensation. If necessary, they file a lawsuit to protect your rights to compensation under the statute of limitations or move your case forward. If you need a skilled attorney on your side, contact our firm today for a free consultation.