Evaluating personal injury claims is a tricky business. In the past six years my firm, CapTran, has underwritten 10,000 requests for pre-settlement advances by plaintiffs. We have never had anyone tell us that their case was not a “slam dunk" or that they were not going to get a substantial settlement. We are always told the insurance company is going to settle quickly because their case and/or attorney are so good.
Our experience tells us – baloney!
Unrealistic expectations in personal injury law are a recipe for certain disappointment. Rarely do even slam-dunk cases get settled quickly for large amounts. Quite the opposite, slam-dunk cases usually involve serious injuries that require a long time to treat. Settlements are rarely reached prior to the victim achieving maximum medical improvement.
Hubris aside, everyone wants to know the real value of their case. Unfortunately, accident victims are often beset with self-appointed experts replete with stories and anecdotal evidence of huge jury awards. They know someone who knows someone who got a huge settlement for a back strain or “whiplash". These influences do nothing but confuse the issue and most of the time has nothing to do with reality.
The truth is that, with the exception of the horrific paralyzing or disfiguring injury, most accident damage awards fall within a very predictable range. The National Transportation Safety Board reports that 3 million people are injured in motor vehicle accidents each year and insurance companies pay out nearly $20 Billion in bodily injury claims annually. The Insurance Research Council conducts a survey of auto claims every five years. The survey’s participant’s account for about two out of every three claims paid in the United States. In short, there is an enormous amount of data available to insurance companies regarding every conceivable type of injury and the amount paid to settle the claim.
Facts to consider
1. The average amount paid for a bodily injury claim is less than $10,000.
2. The amount paid varies widely by state.
3. Insurance companies are very wary of chiropractic treatment, especially if it is the only treatment.
4. Insurance companies are very wary of excessive physical therapy treatment.
If your attorney is experienced in personal injury cases he or she will know the range of values and the claiming behavior of insurance adjusters in your area. Our experience is that attorneys are prone to overestimate the value of your case rather than underestimate it. We urge you to listen to your attorney’s advice regarding claim value because it is unlikely that they will overestimate its worth. If you attorney is not experienced in PI cases – well, get another attorney.
That having been said, we offer the following thoughts that come from our experience. We have limited our comments to the most common type of case - motor vehicle accidents.
Factors to Consider
There are a great many factors that impact on the potential value of you claim. In order to determine whether (and how much) to invest in your case, CapTran® uses these factors or case attributes, to calculate the value of a case. In general we look at the following case attributes:
1. The event
3. Ability to pay
5. “Quality" of the Defendant
6. “Quality" of the Plaintiff – you!
1. The Event
What actually happened? Not what you think happened, or even what you know happened but rather, what can be verified or proven.
The certainty of liability or the availability of a defense will impact the level of enthusiasm the insurance carrier has to settle your case. If there appears to be a valid defense available, even if not perfect, the value of a settlement offer will suffer. If the injuries are minor, the only thing the insurance company has to lose is the expense of trying the case.
3. Ability to Pay
Regardless of your damages, someone has to have the ability to pay in order for you to collect. The availability of insurance or a financially strong defendant is critical to the ability to achieve financial redress for your injuries.
Amount of insurance coverage. Insurance policies have limits on the amount they will pay per accident victim as well as per accident. If you are one of several people injured in an accident you will have to share the coverage with the other claimants. For example, if a policy has a “per accident" cap of $100,000 and five people are injured each with a claim worth of $50,000 (for a total of $250,000) there will not be enough to cover all claims.
Self Insurance. Many large companies self-insure meaning that instead of paying premises to an insurance company, they set aside certain monies each year to establish an insurance reserve to handle future claims. Many times the company will actually have its own so-called captive insurance company.
Severity of impact. This is common sense. If your vehicle has a sustained little damage the insurance adjuster will know that a jury is likely to conclude that no one could have been seriously injured in such a “fender bender". On the other hand, they will not want to go up against an attorney that can hold up a picture of your severely demolished vehicle telling the jury “why, my client is lucky to be alive!"
When you received treatment. If you went to the emergency in an ambulance that is better than if you went to the emergency room two days later (especially if you went to your attorney first).
Soft tissue injuries versus broken bones. Most minor accidents involve what used to be called “whiplash" but are now referred to as cervical strain or sprain. A broken bone is easy to prove and easy for juries to understand. With soft tissue injuries, it is difficult for juries to separate good claims from fraudulent ones. Insurance adjusters know that juries will not award large amounts for soft tissue injuries.
If you have a broken bone, especially if it is a weight-bearing bone, you have an injury that can be verified by indisputable evidence such as x-rays.
Amount of your medical bills. While “meds" are a very significant (often the most significant) factor in determining case value, there is no simple formula to use in determining case value. Forget the junk about “3 times meds" or “3 times specials". Insurance Research Council survey data reveals that bodily injury claims cannot be estimated in such a simple fashion. Values vary widely from state to state and the type of meds is very important. Some rules of thumb are:
1. “Treating" expenses carry more weight with insurance adjusters than diagnostic expenses. It matters little that you decided to have an expensive MRI or CAT Scan.
2. Chiropractic expenses are severely discounted by insurance adjusters (and ignored by us).
3. Excessive visits to the physical therapist are not only discounted by adjusters but along with chiropractic bills also raise a red flag for what is called “build-up".
Medical providers that treated you. Insurance adjusters look for treatment by medical specialists that indicate clear-cut injuries associated with vehicular impact. If you are only treated by the ER physician and perhaps your family doctor it will not carry as much weight as if you were treated by an Orthopedic Surgeon or a Neurologist.
Documentation of your injury. Failure to go for medical treatment, or large gaps of time between treatments, are red flags for insurance adjusters. Inadequate documentation will not pass muster with insurance adjusters.
5. Quality of the Defendant
Appearance matters in court. Every adjuster knows that a sympathetic defendant is less likely to suffer large verdicts. The inverse is, of course, true as well. The kind of evidence, especially prior acts that can be presented in court varies from state to state but defendants must be wary that adverse evidence regarding the plaintiff will see its way into the jury room.
6. Quality of Plaintiff – YOU!
We have had several good cases lost because the jury simply didn’t like the plaintiff. If you appear too strident or are overly aggressive, combatant or belligerent, a jury will find a way to punish you for your behavior.
If you have had several minor accidents a jury may conclude that you are a scam artist.
Above all else, try to be realistic in your evaluation of your claim. The object of the tort system is to compensate you for your damages not to unreasonably enrich you. Be sensible and reasonable and you will enhance your chances for a successful outcome. Good luck!
This article is intended for information only and should not be construed as legal advice. You should consult your own attorney for legal advice.
©Copyright Capital Transaction Group Inc
Wayne C Walker, president of CapTran, the leader in litigation finance. http://www.captran.com