When you file a personal injury claim and you win it, the insurance company needs to establish how much compensation you are entitled to receive. The sum depends on multiple variables and custom circumstances, being hard to determine in most of the cases. When you have a sum in your mind and the insurance company comes up with another amount, it's useful to know how they calculate the compensations.
What events are entitled to receive compensations from insurance companies?
Depending on the type of damage, there are some average compensations you can refer to. The main types of injuries insurance companies need to compensate when a person who is made liable for the accident has to pay for medical malpractice, permanent physical disability and inability to work because of the accident, also called income lost, loss of social, educational or family experiences, as well as special events, emotional damages and property damages.
Emotional damages can range from depression to emotional inabilities or relationships impairment, such as the inability to take care of children or indulge in sexual relationships. Under this category there is the emotional distress caused by the loss of an unborn child, which is probably the most traumatic event for a mother to be.
There is a formula for your losses
As cruel as it may sound, insurance companies have a formula to calculate the value of your damages. Even if suffering doesn't have a value for you, the insurance company need and does have a way to put a price tag on it. This is all to be able to pay compensations, so as strange as it may sound; valuing losses and suffering is in your advantage.
The calculations begin from the total amount of money spent for the injury, which are called medical special damages, or, simply specials. The specials are the base for the general damages, which are the money paid for suffering and pain.
The specials are multiplied with 1.5 or 2 for minor or short lasting damages; the multiplier can raise up to 5 for severe damages or up to 10 in extreme situations, which lead to extreme damages. The next step in establishing the compensations is adding the lost income to the sum calculated to this moment.
The resulting value is the starting point for the negotiations when the parts began to discuss the amount of compensations, so the number is not the final one.
Whose fault it was alters the compensations amount
The formula above is adjusted by another percentage called the percentage of fault. This is the percentage of fault each part can be made liable of. If you were just as guilty as the other part for the personal injury, the sum will be adjusted by 50%, for example.
At the moment of establishing the compensations both parts know their percentage of fault, which can range from10% to 75%.
After adjusting the compensation by this percentage, the parts can talk and negotiate on the actual sum ...