How Insurance Adjusters Value Your Claim
“A nickel ain’t worth a dime anymore.”
― Yogi Berra
Let’s start with the concept of “specials.” At the end of a claim, the insurance adjustor will add up all of your medical bills, whether they have been paid or not. The grand total of your medical bills is what is known as medical special damages, or for short, just specials. They will use this number to determine the total value of your case.
What the adjustor does is take your specials and then use a “multiplier.” This simply means they will multiply the amount of your specials by a certain number. For a small injury, most adjustors will use a multiplier of 1.5 or 2. For example, let’s say you had a grand total of $10,000.00 in medical expenses. In a situation where the injuries are fairly insignificant, the adjustor will multiply $10,000.00 by 1.5. This means they would offer $15,000.00 to settle your case.
For more significant injuries, such as broken bones and those requiring surgery, the adjustor may use a much higher multiplier. Depending on the amount of pain you had to go through and if the injury is particularly long-lasting, the multiplier may go as high as 5. This is pretty unusual though. For most severe injuries, a typical settlement range is more in the neighborhood of a multiplier of 2.5 – 3.
That sounds pretty easy, right? Well the problem is when adjustors try to determine the actual out-of-pockets to compute the specials. Let’s use an example of a case with $10,000.00 in specials. A person may attach $10,000.00 in medical bills to the Demand Package. However, adjustors know that the person will never actually pay $10,000.00. Those bills are always negotiated. A person with that much in medical bills will most likely negotiate the bills down to $4,000.00 – $5,000.00 once the case settles
If the adjustor guesses that the claimant will only pay approximately $5,000.00, many times they will use this estimate with the multiplier. The case will then get an offer to settle at $7,500.00 (using a 1.5 multiplier) instead of $15,000.00. I know this sounds confusing and is probably giving you flashbacks of high school algebra class. The reason this is important though is so you understand the different strategies of insurance adjustors when settling your case.
Please keep in mind that these numbers are estimates and each insurance company uses their own formula. Moreover, this will not be the first offer the insurance company makes. Typically, the insurance adjustor’s first offer will be extremely low. They want to see if you will bite. You then get into the negotiation process and the offers will slowly rise with each piece of correspondence. The multiplier figure will most often be the highest the adjustor will pay after the negotiation process has run its course.
Remember, the best thing you can do is to call the Ticktin Law Group at (954) 570-6757 as soon as possible. By speaking with an experienced personal injury lawyer and going over all the facts of your particular claim, you will get a much better idea of what steps you should already be taking, and what compensation you may be entitled to.