How insurance companies value injury claims

Key takeaways

The short version, before the detail.

• Adjusters price files on documented medicals, provable income loss, permanency and liability risk, in that order.
• Available insurance coverage is often the real ceiling, regardless of how serious the injury is.
• Gaps in treatment and pre-existing conditions are the two levers used most often to reduce an offer.
• Software-generated valuations produce a range; the number inside that range is a human decision.
• The file is priced partly on who is holding it and whether it looks ready to be tried.

What goes into the number

• Medical specials. The billed and paid amounts, what was reasonable, and what is still to come.
• Lost income. Documented, not estimated. Pay records and an employer letter, not a recollection.
• Permanency. Whether a physician will state, within a reasonable degree of medical probability, that the injury is permanent.
• Liability risk. The carrier's own estimate of the chance a jury finds against its insured, and by how much.
• Venue. What juries in Palm Beach County have done with comparable facts.

What reduces the number

Two things do most of the damage.

Treatment gaps. Six weeks between appointments reads, to an adjuster, as six weeks during which you were fine. The reason may have been work, childcare or money, but unless it is in the record it is not in the file.

Pre-existing conditions. A prior back complaint is not a defense, and Florida law recognizes aggravation of a pre-existing condition. It is still the first thing raised, and it is answered with records that distinguish before from after.

The ceiling nobody mentions

A catastrophic injury caused by a driver carrying $25,000 in bodily injury coverage is, absent other sources, a $25,000 claim. Finding the other sources — uninsured motorist coverage, umbrella policies, an employer's vehicle, a commercial policy — is often worth more than any argument about pain and suffering.