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In the aftermath of a car accident, it’s important to understand the approximate value of your claim before negotiating with insurance companies. If you’re not sure of what your claim is worth, you won’t know whether your claim is being properly valued by adjusters.

Knowing how insurance companies are likely to calculate the approximate value of your claim can help you to set realistic expectations and make informed choices about your situation. Here’s a look at how car accident compensation is calculated and how it might impact your case.

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What Can Be Covered In A Car Accident Compensation Claim?

After you’ve filed a car accident claim with your insurance company or the company that provides coverage for another motorist involved in your accident, a claims adjuster will be assigned to that case. The adjuster will be looking for evidence to support any injury or property damage claims you make.

Here are some examples of what can be included in a car accident compensation award:

  • Past, current, and future medical expenses related to your injuries
  • Repair or reimbursement costs for damage done to your car
  • Wages lost while you took time off of work to recover
  • Pain and suffering

Once the kinds of losses you have suffered have been identified, the question becomes, how much are you owed as a result of these losses?

Calculating Car Accident Compensation For Property Damage

If the only issue in question is property damage, calculating an accident victim’s losses is usually a straightforward process. An insurance adjuster simply needs to determine how much it would cost to repair the vehicle damage caused by the crash.

If it would cost more to repair the vehicle than the vehicle’s pre-crash value, the vehicle will be classified as a “total loss.” Some states allow cars to be classified as totaled if the cost to repair them exceeds anywhere from 50-90 percent of their pre-crash value. For example, in Minnesota, a car is totaled once its repair cost exceeds 80 percent of its pre-crash value.

If your vehicle has been totaled and is now a salvage vehicle, your insurance company will file a salvage title notice with the state and should reimburse you for the pre-crash value of the vehicle.

Calculating Car Accident Compensation For Personal Injuries: The Multiplier Method

While accounting for property damage is a relatively straightforward process, calculating an accident victim’s damages from their injuries can be a little more difficult. Adding up past medical bills and lost wages can get you some clear numbers, but it gets a little more ambiguous if you need to project future medical bills and lost wages, or pain and suffering,

Because pain and suffering can’t be quantified objectively, a damage formula estimate must be employed to arrive at a reasonable payout. There is no single formula that insurance claims adjusters use to calculate the value of car accident settlement awards. Based on the insurance company’s best practices, the adjuster will likely use some variation of either the multiplier method or another generalized damage formula to calculate the approximate value of your losses.

Many insurance claims adjusters use some variation of the multiplier method to calculate car accident compensation for pain and suffering. Using this method generally involves:

  • Totaling the victim’s past medical bills and anticipated future medical costs
  • Multiplying that medical expense total by a numerical factor (usually a fraction or whole number between 1 and 5) to estimate the victim’s non-economic “general” damages, including pain and suffering
  • Adding the medical expense total to the estimated general damages total
  • Adding that overall medical total to the property damages total, and the total of any lost wages or earning potential to arrive at an overall car accident compensation claim estimate

Use Car Accident Settlement Calculators With Caution

If you’ve been searching for ways to value your claim online, you’ve probably come across your fair share of car accident settlement calculators. While these calculators do provide a black and white answer, they are not reliable and can’t account for specific factors in your case which might affect the claim value.

For example, car accident settlement calculators can’t usually account for which numerical factor an adjuster will use when multiplying a victim’s medical bills to arrive at a general damages estimate. They also can’t account for insurance adjuster concerns that may devalue a claim estimate. For example, if a claims adjuster believes that the treatment a victim receives is excessive or also treats preexisting conditions not originated by the accident, they may lower the compensation value of a claim as a result.

Although car accident settlement calculators and damage estimators can give you some sense of what your case might be worth, discussing the nuanced details of your situation with an attorney will likely give you a more accurate sense of your case’s ultimate value.

Ready To Pursue Car Accident Compensation In Your Case?

If you’ve been injured or suffered property damage due to a car accident, it’s time to explore your legal options. To receive personalized guidance and assistance, consider a free initial review of your case today.

Legal Disclaimer: This article contains general legal information but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.

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