Frequently Asked Questions - How Is Personal Injury Settlement Calculated?
Not every motor vehicle crash, slip and fall, premise liability, dog bite, or any other kind of personal injury loss is the same; every personal injury case is vastly different. Thus, as you can imagine, personal injury settlements vary tremendously. There is no specific widespread equation to determine a personal injury settlement. Instead, a personal injury settlement is calculated to reimburse your precise losses from the accident.
A multitude of factors are considered when evaluating a personal injury case and calculating its settlement value. We can categorize those factors into three segments: Special Damages, General Damages and Punitive Damages. Special Damages are the economic losses that the accident caused, i.e. current and future medical bills, current and future lost income, property damage, and any out-of-pocket expenses. General Damages are the non-economic losses you sustained from the accident, i.e. pain and suffering, emotional distress, loss of consortium, and loss of quality of life. Finally, Punitive Damages are an additional award given to the plaintiff which is meant to punish the defendant if his or her behavior was found to be extraordinarily malicious or reckless, i.e. drunk driving.
All damages must be proven to the insurance company before they will be added or considered to your personal injury case’s evaluation. You or your personal injury attorney will submit your medical bills, receipts for any out-of-pocket expenses, and substantiation of your wage loss to the insurance company as evidence of your economic damages from the accident. This is most often irrefutable proof of your Special Damages. Although, on occasion, insurance companies may not include certain bills or expenses in their settlement evaluation if they believe they are unrelated or egregious.
Establishing evidence of non-economic damages is most often accomplished within your medical records. In Florida specifically, a threshold must be met in order for you to qualify for pain and suffering compensation. The threshold is as follows: (1) death, (2) significant and permanent loss of an important bodily function, (3) significant and permanent scarring or disfigurement, and (4) permanent injury. The majority of personal injuries cases meet the pain and suffering statutory requirement through permanent scarring or permanent injury. If there is no evidence of the above-mentioned in your medical records, then according to Florida Statute you did not met the threshold requirement and the at-fault’s insurance carrier is not required to consider pain and suffering into their evaluation of your case. This obviously will highly affect the monetary value the insurance adjuster will place on your case, as they will likely not offer anything beyond your outstanding medical expenses.
Punitive damages, also called exemplary damages, only come in to play under extenuating circumstances. The event must lie far beyond a simple accident in order to file a claim for punitive damages. According to Florida Statute, you must provide specific evidence of intentional misconduct or gross negligence from the defendant. Meaning, you would need to prove that either the defendant had knowledge of the wrongfulness of the bad conduct and the high likelihood that injury to the plaintiff would result and, despite that knowledge, intentionally pursued that course of conduct, or that the defendant was so reckless that they exhibited a conscious disregard to the plaintiff’s life or safety. As an example, being the victim of a drunk driving motor vehicle crash would be just cause for seeking punitive damages. As that person would have prior knowledge that driving under the influence is extremely dangerous and has a high probability of injury or damage. Yet, they decided to drive their vehicle under the influence anyway. Even so, the cases that are eligible for punitive damages can be quite challenging to substantiate the appropriate evidence. The burden of proof on the plaintiff is very high. Also, in most states, there is a cap of the amount of punitive damages that can be awarded.
Alternatively, there are also certain circumstances that can negatively affect the calculations of your personal injury settlement – liability issues and low policy limits. First and foremost, simply because you were in an auto accident or because you slipped and fell in a store, does not automatically guarantee that you will receive a large monetary settlement, or even a settlement at all. As you can see from the aforementioned, you must prove your injuries and damages in order for them to be considered.
Even so, some factors that are out of your control can have a sizeable effect on your personal injury settlement value. For instance, in certain situations, the at-fault insurance company may not accept 100% liability for the accident. Whether they opined you slipped and fell in their store due not paying proper attention or perhaps the automobile insurance carrier feels you are partially to blame for causing the crash for not trying to avoid the accident – whatever the reason, the effect is the same. Comparative negligence can significantly decrease your personal injury settlement’s value. Should the at-fault insurance company believe their insured to only be 60% liable. Then, the insurance company will likely deduct 40% off your case’s valuation prior to submitting a settlement offer or any settlement offer. In addition, your personal injury settlement amount is confined to the insurance company’s policy limits. As mentioned previously, your personal injury settlement is determined based off the injuries you sustained, the medical treatment you underwent and your damages. Generally speaking, if you have sustained significant and severe injuries, you will be awarded a higher settlement than someone who only sustained minor injuries. Yet, again, it is largely dependent on the policy limits for your case. If there are low policy limits on your case, then it essentially does not matter if your case is worth more than the policy limits as your settlement offer will max out on the amount of the policy limits. Using the same logic, just because there are high policy limits available to you for your personal injury case, does not mean that you automatically are owed the entire policy limits. If there are $1,000,000.00 available in liability coverage, this does not mean that you will be receiving $1,000,000.00. Your personal injury settlement will still be calculated from your specific injuries and damages.