A personal injury lawsuit is as much a negotiation as it is a legal proceeding, and your attorney will need plenty of negotiating experience to get you the best possible settlement. There are two primary ways that personal injury settlements are calculated; a daily rate and a series of mathematical calculations involving multipliers.
There are no laws in most states that dictate how a settlement is to be calculated. In most cases, it is based on how insurance companies determine the value of each case and the methods the insurance companies use. Your attorney will start with high numbers and prepare you to get a settlement that is lower, but that is only because your attorney knows that negotiations always end with some kind of compromise.
For the calculations method, all of your losses are added together and multiplied by a number between 1.5 and five. Your losses include property damage, medical bills, and lost income. The multiplier is used to compensate for any ongoing medical bills or lost income. When that number is calculated, it is then multiplied by a second number, usually between one and five, that is meant to represent the amount of effect the accident had or will have on your quality of life.
As you can see, there are plenty of variables here for your attorney and the insurance company to squabble over. Insurance companies want to pay you as little as possible, but you want to be fairly compensated for the pain and suffering you have and will sustain due to the accident. In the end, the number that is agreed upon is somewhere between your attorney's calculation and what the insurance company considers fair value.
The daily rate method is simply a calculation that uses the amount of income you generate per day multiplied by the number of days you have been affected by the accident. If you lost 100 days to work because of the accident and you make $200 per day, then your attorney would ask for a settlement of $20,000.
The daily rate method sounds simple, but it is filled with problems. For one thing, this method does not take into account costs such as property damage, medical bills, and lost income. It rolls all of those things into one number and goes for a lump sum settlement. The other issue is trying to determine how far into the future you will be feeling the effects of the accident. These are just two of the reasons why this method is not used as often as the calculation method.
If you want a fair settlement, then let your attorney do all of the talking. You should never try to call the insurance company on your own, and you should never try to mail any information to your insurance company. Every aspect of your negotiation should go through your attorney.
You should get regular medical examinations from your doctor and provide the results of those examinations to your attorney. Always give your doctor an honest assessment of your pain, and take any medications your doctor prescribes.
Getting a personal injury settlement feels like you just won a marathon negotiating session. That is because personal injury settlements are one part negotiation, and one part legal proceeding. In the end, it is the negotiation skills of your attorney that will make all of the difference.
