How insurance companies calculate car accident settlement claims

The insurance companies tend to value your claim based on the projections they have regarding how a case is going to come out in case they were to go on trial. According to, when a judgment is won by a plaintiff at the trial, the judgment will be due to several damages. The insurance adjusters deal with various car accidents each day and thus, they are efficient as far as claim valuation is concerned.

The basic formula which the insurance companies utilize in calculating the auto accident settlement is multiple reflecting of general damages x special damages + the lost wages = the amount to be settled.

The special damages

They are the losses that are caused by the actions of the defendant which can be assigned in form of monetary value. The cost of the losses can quickly add up to an exact amount of dollars. The common general damages include:

  • Medical expenses
  • Loss of wages
  • Damage of property

Once the adjuster totals the special damages, they will go ahead multiply the dollar amount by that particular figure, depending on the accident and injuries severity. The multiple will be utilized in reflecting the severity of the general damages.

General damages

It refers to the losses which are a result of the wrongdoings of the defendant but can’t be assigned a particular amount of money. An example of such includes:

  • Emotional damages like depression and stress
  • Loss of activities enjoyed
  • Loss of consortium that can be based on relationships which get damaged

Due to there being evidence like receipts or bills which can help in assigning a particular value to the general damages, they are normally calculated differently. There are multipliers which insurance adjusters assign to the total of all the special damages. The multiplier is the representation of the general damage when it comes to the settlement of the auto accident formula and it is mostly known as method of multiplier.

What is method of multiplier?

It is having to assign a value which is on a scale of  a maximum of 5 which is depending on the special damages severity as well as  the significance it has impacted on you by the accident. When the accident is serious, it means the injuries will be serious and thus the multiplier will be high.

Lost wages

With the new number of the special damage and the general damage totals, the adjuster will add any other amount of the lost wages which you might have experienced due to the injury.