This question is one of the most frequently asked questions and is also very difficult to answer in the early stages. It is virtually impossible to predict the value of a case until all of the information has been collected, and you have recovered or almost recovered from your injury. There are many factors that determine the value of a case. They include:
- The actual amount of all of your medical bills?
- How such medical bills were incurred; i.e. from diagnostic tests, treatments, physical therapy, hospital stays, prescriptions, medication, over-the-counter medications, chiropractic care and other treatment?
- How much income and other employment benefits were lost as a result of your injury. This would include lost pay, sick leave used, vacation time used, loss of insurance benefits and other losses resulting from your injury?
- The actual extent of your injury and how such injury affected your daily life. This would include limitations of household activities, sports and leisure activities and social life?
- Whether any of your injuries required hospitalization?
- The extent of liability on the part of the potential defendant?
- Whether there is any evidence that you were partly at fault for your own injuries?
- The status of the law as it relates to your case?
- The quality of your witnesses, including those who will testify about the incident, your injuries, and your medical treatment?
- Other factors such as pain, suffering, inconvenience and loss of consortium (how the injury affected your marital relationship)?
- Which insurance company is involved in the case?
The above are just a few of the factors that must be taken into consideration in determining a settlement value. Some factors are more important than others and because insurance companies require specific documentation, it is your responsibility and that of your lawyer to provide the insurance company with as much clear information as possible to support your claim.
How does the insurance company determine the value of my case?
This question is quite complicated. First, the claims supervisor, or claims manager, will provide that a certain amount be “set aside” as a potential value of your case. This figure is usually called “reserves.” Such reserves are the outside value that the company has established on your claim. The reserves may change as the case progresses. In serious cases, such reserves may equal what are called policy limits. Policy limits are the outside limit amounts of liability established in the insurance policy of the person or persons who caused your injury.
During the preparation stages of your case, the insurance company will keep track of your medical bills, lost wages, and permanency regarding your injury, and other factors. The company will also take into consideration the quality of evidence against their insured, the quality of your witnesses and their witnesses, extent of liability or your part, and other important considerations such as previous injuries.
What steps will be taken to settle my case?
After the investigation and research has been completed, your lawyer will keep in touch with the progress of your recovery. Hopefully, your injury will not be a serious one and eventually it will be appropriate to attempt settlement. After a settlement range has been decided upon, your lawyer will send what is usually called a letter of demand to the insurance company.
The letter of demand summarizes the important factors of your claim and is a formal request to initiate settlement discussions. After the insurance carriers claims adjuster receives the letter of demand he or she will meet with the appropriate supervisors to obtain settlement authority. Once the adjuster has his or her final authority figure, he or she will respond and negotiations between your lawyer and the insurance adjuster will take place.
Will the insurance carrier pay the demand figure in my attorney’s request for settlement?
In many cases, the final demand figure issued by your attorney in the first letter requesting settlement is substantially higher than what the insurance company will be willing to pay. This is a common occurrence for personal injury cases.
Because of your attorney’s experience in this area of law, a request for settlement will usually be made in an amount that gives both parties a fair amount of room to negotiate. Therefore, do not consider the demand figure to be the actual settlement range of your case.
How long does it take to complete settlement after the first letter of demand?
In most cases, the amount of time it takes from the first letter of demand to the final settlement can be several weeks to a few months or sometimes longer. In smaller, clear-cut liability cases where the injuries are fairly minimal, the process can be achieved in a month or two usually. Every case is different, however, and your lawyer will advise you about his or her opinion on the amount of time it will probably take to settle your case. There are many factors which affect the response time and the adjusters final offer. They include:
- How many files the insurance adjuster is handling?
- How well documented the claim has been during the preparation period?
- Whether or not liability is clear on the part of the insurance company’s client?
- Whether there is any comparative negligence on your part?
- Whether or not there are any other parties that may be responsible for your injuries?
- The internal claims process of the particular insurance company including the number of supervisors required to approve the adjuster’s settlement offer?
- How reasonable your lawyer’s demand figure is?
- The time of year (some months are better for settlement than others)?
- The state of the economy as it relates to the insurance claims process?
- Other possible factors?
Because the insurance company will undercut my attorney’s request for settlement, why not request a very large sum to begin with?
Many people believe that because the carrier will come back with a lower figure the demand, the attorney for the injured person should request a very high figure to begin with. This tactic is typically counterproductive. If the first demand figure is way out of line, most insurance companies will not even respond to the request for settlement.
Asking for an unreasonably high figure for settlement will often delay the process and sometimes make the insurance company refuse to make any offer at all. Therefore, it is important that the first demand be reasonable at least. Because your lawyer is experienced in this area of law, he or she will have the best idea as to amount for the first demand figure.
After the insurance company and my attorney agree upon settlement, how long will it take before I receive my money?
After an agreement has been reached between the insurance company and you through your lawyer, it usually takes between two and six weeks to complete the settlement process. There may be exceptions to this range, but the average time to sign all the documents, receive the check and figure out the exact proceeds for each party usually requires at least a month.
After attorneys fees, medical bills, liens, and costs, will there be anything left for me?
It is our goal to obtain an adequate sum of money left for you to compensate you for pain, suffering and some loss of income. There are many factors influencing settlements. Such factors include the amount of your medical bills, whether those medical bills have to be paid from the settlement, whether you actually lost income from your job or used sick leave, etc. If you have to pay all or your medical bills from your settlement or reimburse a health or medical payments carrier, this will substantially affect the final amount.
You must remember that the laws allow you to be compensated for your injury to give you compensation for lost wages, medical bills, and a reasonable amount for pain and suffering. The law does not provide that injured parties “get rich” from insurance claims, especially in small cases. Your attorney will do his or her best to see that you get fair compensation for your injuries.
.:About the author:.
James Sheridan is the Contracts Manager at Pegasus Legal Funding LLC and is responsible for the final stage of the funding approval process. James focus and priority is delivering to PLF’s clients the funds they need as quickly as possible