Personal injury case evaluation requires thorough review of many factors some of which include:
1. the amount of the medical bills
2. the extent and periods of disability
4. loss of function
5. residual symptoms
6. lost wages
7. impaired earnings
8. potential need for future treatment
THE MAGIC MULTIPLIER
In the old days some of the attorneys and adjusters simply took the amount of the medical bills and multiplied them by a “magic number”. For example, the medical bills might be added up. Sometimes lost wages were also lumped into the formula. The total was multiplied by 7 to 10 for the “demand” to the insurance company, depending on the attorney’s strategy and perhaps experience with the particular insurance company or claims adjuster. Then, the insurance company would make an offer, and it was often a universally accepted truism that a final settlement of 3 times the total of the “specials” or medicals and lost wages, was a good day.
However, this approach has been for the most part largely rejected for many reasons due in part to the ever increasing cost and use of various diagnostic testing which can sometimes increase the total of the medical bills out of proportion to the actual injury. Also this approach fails to address variations in wage loss. There is also a built in minimization of damages for those who go on with their lives more quickly or “mitigate their damages” as the law requires.
SLIDING SCALE OF LOSS EVALUATION
Another standard approach towards putting a dollar amount on injuries draws a time line after the date of injury, assigning periods of total disability, partial disability and residuals. It would require dozens of pages to explain how insurers and attorneys arrived at various numerical quantifications for periods of total, partial and residual. But in this scheme, such numbers were interpolated based on factors such as whether an individual did heavy duty work, light duty, what their actual average weekly wages were and other considerations. However, this evaluation approach fails when the injured is for example an in home mother of children or a college student and there are no actual “wages” and a numerical equivalent must be fashioned.
COMPUTER EVALUATION PROGRAMS
The insurance industry has employed various computer models to evaluate personal injury claims. Among the first such insurance claim evaluation program was “Colossus” which employed some of all of the above factors and more. As attorneys sent medical bills and other claim documentation, adjusters would key in various points and the program would calculate an evaluation based on numerical weight assigned to criteria built into the system. This is one of the most arbitrary claim evaluation approaches. For example, among many anomalies, a subluxation injury diagnosed by a medical doctor is given value, while the identical subluxation diagnosed by a chiropractor is given no weight.
NO MAGIC FORMULA
Having evaluated thousands of personal injury claims it is clear that no two injuries are the same, nor do they affect any two individuals in an equivalent manner. However, in seminars where hypothetical injuries are summarized it is uncanny how a roomful of experienced attorneys will all arrive at a close range of settlement value.
WHY THE INSURANCE COMPANY WANTS YOU TO 'DO IT YOURSELF'
One client came to me after struggling for months with attempts to settle themselves with the insurance company. They had made a demand and did not understand why the insurance company would not give them an offer. I took that claim and settled it several months later for over twice what that do-it-yourself injured person had demanded from the insurance company.
This is why the insurance industry wants you to “do-it-yourself” and actively discourages folks from seeking legal representation.
I practice personal injury law in Massachusetts and New Hampshire. However, these factors are universal. Do not do this yourself. The insurance industry’s own statistics indicate that once an attorney is brought into any claim, the value of the claim at least doubles.