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How Do Insurance Companies Evaluate Personal Injury Claims?

After you have been involved in an accident where you sustained personal injuries, you will need to file an insurance claim with the appropriate insurance provider. Whether it was an auto accident; slip, trip, and fall accident; or on-the-job accident, you could be dealing with both your own insurance company and the other party’s insurance company.

The timeliness of filing a claim is essential in order to ensure you get a fair and reasonable payout. You cannot wait until several months after the accident and then decide, all of a sudden, that you are going to file a claim.

Not only could you have exceeded the statute of limitations for filing your claim, but also the insurance company is going to question the validity of the claim. Even if they do approve your claim, the settlement amount offered will be significantly lower than if you had you filed immediately following your accident.


The first step in the process is you contacting the insurance company to file your claim. For instance, if you were in a car accident, you would initially call your own insurance company to start the process.

Your insurance company may then submit the damage claim to the other party’s insurance company on your behalf. Otherwise, you would also need to contact the other party’s insurance company to file a claim for damages.

During the filing process, you may be required to provide certain information and go through an interview process. Basically, this is telling the insurance company your side of the events that resulted in your injuries.

Even at this early stage, you have to be careful. Insurance interviewers are skilled at asking you leading questions, which they can and do use against you later. They might ask if you are feeling any better since the accident while sounding like a caring and supportive best friend.

If you tell them you are feeling better, they will make note of this. Then, when it gets to the pain and suffering portion of your claim, they will question whether you are truly in pain and suffering since you told the interviewer you were feeling better.


After you initiate the claims process, the insurance company will assign an adjuster to your claim. Adjusters tend to have years of experience, access to high-tech software, and the support of the insurance company’s legal team for assistance and advice. The adjuster’s primary goal is to value your claim and make a settlement offer for the least amount possible.


The adjuster will start to gather their own evidence. They will interview the party responsible for causing your personal injuries and accidents. They will also speak to any witnesses who were present when the accident occurred. In addition, the adjuster will review police reports, medical reports, and other documentation related to the accident.

Adjusters have also been known to dig into the plaintiff’s past to see if they can uncover pre-existing conditions, previous personal injuries claims, and so on. Furthermore, they can demand you provide proof of injuries, lost wages, and any other damage claims for which you are seeking monetary compensation.


The next step is for the adjuster to review everything they have gathered. They will go over each document and piece of evidence in great detail. They will take the time to consult with their team of lawyers if they find something they might be able to use against you to reduce or even reject your personal injury claim.


The adjuster will now assign a value to your claim. They use a basic formula which can be broken down as follows:

  • The amount of your medical costs.
  • The amount of any lost wages.
  • Assign a value to the pain and suffering part of the claim.
  • Assign a value to unearned future earnings, if applicable.
  • Assign a value for disfigurement or disability if part of the claim.
  • Assign a value for other emotionally-related claims.
  • Assign a value for any property damages, if applicable.

For the first two values, the adjuster will simply add these two items together. For the other items, the adjuster uses special software which assigns a percentage value using the value of the first two items as a general reference. No insurance company is willing to share the specific formulas they use.

In general, it is typically a portion of the total amount being claimed for medical bills and lost wages, along with a multiplier that can range from as low as 1.5 to up to 10. To illustrate, let’s assume your initial damage claims amounted to $3,000 in medical bills and $1,500 in lost wages.

The adjuster would then take $4,500 and use the software to determine the amounts for the other values using anywhere from $6,750 ($4,500 x 1.5) to $45,000 (4,500 x 10). Once values are assigned to each item, then they are totaled to arrive at a settlement amount. However, this amount may not be what the adjuster will initially offer.


There are a few other things the adjuster will review prior to making an initial settlement offer. To begin with, they will take a look at the policyholder’s policy limits. If the total amount their computer software said you were entitled to receive was more than the policy limit, they will reduce the offer.

For instance, the software determined you were entitled to receive $20,000, but the policy limits are $15,000. The insurance company is not going to pay out more than what the insured is covered for, so the adjuster would reduce the settlement amount to $15,000 or less.

Next, the adjuster will take into account how strong of a case you could have if you filed a personal injury lawsuit through your own personal injury attorney. If you have a very strong case against the other party, their insurance company will be more willing to make a higher settlement offer just to avoid losing in court. On the other hand, if your case is not that strong, then the insurance company will offer you much less than the amount their software determined you should receive.

Last, they will consider the percentage of fault for you and the other party. Some states, like Texas, use comparative negligence when determining the value of personal injury damage claims. What this means is that your settlement amount will be reduced by the percentage you were at fault for the accident.

For example, if the adjuster determines you were 25% at fault, your settlement offer will be reduced by this amount. Let’s assume the adjuster’s software said you were entitled to receive $10,000. However, you were 25% at fault. After reducing your claim, your settlement offer would only be $7,500.


Once the adjuster arrives at a final amount you could be entitled to receive, they will review this with their team of lawyers. Their lawyers will often recommend reducing the amount of the offer to the least amount allowed. The reason they do this is it gives the insurance company room to negotiate if you reject the initial offer.

There is no set industry standard on how insurance companies and adjusters arrive at the first settlement offer. However, the goal of ALL insurance companies is to make the offer appear to be the most you will get for your personal injury claim, even though you potentially could be entitled to more.

They want you to accept the first offer because it means the lowest payout amount. You have to remember insurance companies are “For-Profit” businesses. They are in business to make money, not pay out hefty settlements for injury and property damage claims.


You could accept the offer and be done with the claims process. However, this is not always in your best interest. The insurance company will require you to sign a release to get your settlement check. This document will contain language which prevents you from filing any future claims against the other party for this particular accident.

Let’s assume you signed the release and took the first offer. Six months later, you find out from your doctor there are complications from the accident and you have to have back surgery. Since you already signed your rights away, you cannot go back and claim the costs of the surgery. Rather, you will have to pay for the surgery yourself.

The best course of action to take is hiring a personal injury attorney as soon as possible following your accident. Accident lawyers provide free consultations and will gladly review your claim and the amount you are being offered.

They will provide you sound legal advice and help you decide whether you should accept the offer. If they believe you are entitled to receive more than what you were offered, they will let you know. If you are entitled to much more, at this point, it is a good idea to retain their legal services and let them negotiate your final settlement amount.


By retaining help prior to filing your claim, your lawyer can be there with you throughout the entire claims process. They can help you prevent making mistakes or telling the insurance company something they will use against you.

Most importantly, they will help ensure you get the best possible insurance settlement from the insurance company while dealing with them on your behalf so you can concentrate on recovering from your injuries.

To schedule a free case evaluation and consultation appointment with one of our accident injury lawyers, please feel free to contact Schechter, Shaffer & Harris, L.L.P. at 713-893-0971 today!

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