How to Calculate Your Car Accident Compensation Amount
After a car accident, you may find yourself facing a mountain of bills and expenses. Getting your car repaired is expensive enough, however, you may also have rising medical costs, as well as lost wages to consider. If your injuries are likely to result in serious or permanent impairment and disability, you may need to factor in future expenses and reductions in earnings as well. As such, you could need significantly more money than you even realize at this point.
Hiring an experienced Arkansas personal injury lawyer is the best way to ensure that all of your expenses and needs are considered after a serious car accident. Your attorney can help you determine compensation properly and ensure that all expenses are factored into any settlement or award you receive. This includes expenses you have yet to encounter.
If you do decide to try and calculate your car accident compensation amount on your own, here are some things you need to consider.
What Information Do You Need?
Before you begin calculating your car accident compensation, you must first gather the necessary information. This information will help you shed light on the damages you suffered and includes:
- Medical bills
- Out-of-pocket medical receipts
- Medication receipts
- Car repair bills
- Reduction in the value of car due to accident
- Future medical bills estimate
- Property damage receipts and estimates for items in the vehicle that were destroyed, such as laptops, cellphones, and car seats.
It is important to know that your property value may decline even after it is repaired. You can contact the dealership or repair shop to get a better estimate of what the repairs will cost and whether your trade-in or buy-back value will be decreased.
While property value may be easier to determine, calculating medical expenses is tricky. Keeping receipts can help you figure out past expenses, but what about future costs? Future treatment, surgeries, and hospitalizations for your injury should be covered by any settlement you receive. Otherwise, you will be on the hook for paying those expenses yourself. That is why an experienced attorney should be contacted immediately. Without an attorney on your side, you may not get the money you need to deal with all of your injuries and the entirety of your recovery.
How Do Adjusters Determine the Value of a Claim?
When determining the value of your claim, insurance adjusters will get to work immediately. They are looking for any way to delay or deny as much compensation as possible. To do this, they must look for ways to pin some of the blame on you, or claim that you had a pre-existing injury.
At the beginning of the process, the insurance adjuster will add up the total medical expenses already spent on your injury. They will multiply your medical expenses by a number between 1 and 5 based on how serious they believe your injuries to be. This is known as the multiplier method. It is this number that the adjuster will use as a base for negotiations. How do they calculate this number?
What is the Multiplier Method?
The multiplier method tries to make the process of settling after a car accident a little easier. Insurance adjusters take the total value of special damages and multiply that by a number between 1 and 5. Minor injuries may have a multiplier of just 1, while more serious and permanent injuries and disabilities may receive special damages multiplied by 5. Three is often the most commonly used multiplier. The end number is indicative of the pain and suffering you experienced.
For example, suppose you suffered injuries in a car accident in Arkansas and racked up $10,000 in hospital bills and medical expenses. The insurance adjuster may decide to multiply the medical expenses by 3 to help them arrive at a starting point for negotiations. Using the multiplier method, they will determine your pain and suffering to be $30,000. Any settlement they offer will factor in this amount, plus compensation for the medical bills and any additional lost wages.
Limitations of the Multiplier Method?
As with any process, there are limitations and disadvantages to using the multiplier method. While it may be fairly straightforward and easy, it is inconsistent. An accident victim with a spinal cord injury could find one adjuster using a multiplier of three, while another may use a multiplier of just 2.
In addition, the multiplier method only looks at medical bills and other tangible bills. It fails to take into consideration an accident victim’s TRUE pain and suffering and living circumstances. A victim who owes less in medical expenses may, in fact, experience more pain and suffering.
For example, a surgeon who suffers a hand injury may have significantly more pain and suffering because of their inability to continue in their chosen profession than someone who works a desk job. Pain and suffering are unique and should be calculated to accurately reflect the victims and their suffering.
The Per-Diem Method
Another method some insurance companies and adjusters use is the per diem method. This method allocates a daily amount for pain and suffering based on your injuries. They may determine your injuries are not severe, so a daily per diem of $15 a day may suffice. This method is not desirable either because it fails to fully take into account your specific injuries and how they may affect your life, your relationships, and your future. In addition, a per diem value is inconsistent at best.
How Accurate are Car Accident Settlement Calculators?
Many car accident victims want to use car accident settlement calculators online to help them determine if the settlement they’re receiving is fair. This is not an accurate way to evaluate an insurance company’s offer. Before determining if a settlement offer is fair and something worth taking, you must consider many factors. Your pain and suffering are unique and cannot be accurately calculated by a formula or an online tool.
An experienced car accident attorney is the best resource you have for determining the true value of your claim. Your attorney can work with your medical team to determine how your specific injuries will affect your life and your future. Any settlement you agree to must take into consideration how your injuries impact your life and the pain and suffering you personally endured and will continue to experience.
Why You Need an Arkansas Car Accident Attorney
At Rainwater, Holt, & Sexton, LLP, our Arkansas car accident attorneys have decades of experience representing injured accident victims. We know that at first glance an injury can seem minor or easy to estimate. However, we have seen firsthand how quickly a minor injury can turn into a chronic and debilitating disability. That’s why we take the time to personally evaluate your case and your injuries before negotiating any settlement or claim with insurance adjusters.
Our lawyers work with your medical team and other experts to determine what your future may look like after your car accident. Will you need future therapies, surgeries, or hospitalizations? How likely is it that your injuries will impact your ability to work full-time? Will you reach a full recovery? These are all questions we ask because you deserve to know the answers to these questions before you sign anything.
Contact Our Arkansas Car Accident Lawyers
With seven offices conveniently located throughout Arkansas and Tennessee—Little Rock, Springdale, Conway, Hot Springs, Jacksonville, Bryant, and Memphis—our Arkansas and Tennessee car accident lawyers are easily accessible from the moment you need us.
Contact Rainwater, Holt & Sexton Injury Lawyers today. Fill out a free contact request form, which only takes a minute, or simply dial (800) 767-4815 and tell us your story.