How Much is my Claim Worth?


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Many of my clients want to know “How much is my claim worth?”  The short answer is “It depends.”  The long answer requires an evaluation of many different factors.  By considering these factors and evaluating the evidence that would be admissible at trial, we can more accurately evaluate settlement offers made by the insurance company and formulate settlement demands that are reasonable and supportable under the circumstances. 

Most of the following factors will be relevant to most personal injury claims, but some factors will have no bearing at all, depending on the nature of the claim.  The weight to be given to any particular factor is a judgment call. 

This analysis is by no means an exact science.

Important Elements

  1. Liability of the Defendant
  2. Insurance Coverage Available to Pay Damages
  3. Severity of Injuries
  4. Medical Expenses
  5. Lost Income and Wages
  6. Pain and Suffering, Disability, Disfigurement, Etc.
  7. Failure to Mitigate Damages
  8. Claims Against Governement Entities
  9. The Identity of the Attorney Representing the Plaintiff
  10. Whether a Lawsuit is Filed
  11. Other Accidents
  12. Setoffs
  13. Mistakes During the Claim Handling Process
  14. Doctors and Medical Records
  15. Clients with Criminal Convictions
  16. Punitive Damages
  17. Conclusion

1. Liability of the Defendant

Under Florida law, a person is responsible for damages caused by their negligence.  According to Florida's standard civil jury instructions, “Negligence is the failure to use reasonable care, which is the care that a reasonably careful person would use under like circumstances.  Negligence is doing something that a reasonably careful person would not do under like circumstances or failing to do something that a reasonably careful person would do under like circumstances.”  Some common acts of negligence include driving carelessly and leaving slippery substances on the floor where people are expected to walk.  The potential acts or omissions that would constitute negligence are virtually limitless.

A factor related to the liability of the defendant is the comparative fault of the injured person or other people.  Under Florida law, a negligent person is only liable for his or her percentage of fault in causing an injury.  If the injured person or some other person was also somewhat negligent and that negligence contributed to causing the injuries, then the defendant’s responsibility will be reduced proportionately.  At trial, a jury will be required to allocate fault among all negligent persons such that the total negligence equals 100%.  If the defendant is found to be only 75% at fault, then he or she is responsible for only 75% of the total damages.  Obviously, the greater the percentage of liability of the defendant, the more money the injured person can expect to recover from the defendant or his or her insurance company.

2. Insurance Coverage Available to Pay Damages

Under Florida law, the only insurance an automobile owner is required to maintain is personal injury protection (PIP) and property damage (PD) coverage.  PD insurance is designed to pay for damage to property caused by the owner’s negligence.  PIP insurance is designed to pay medical expenses of the owner of the car and its occupants, not other people who are injured by the owner’s negligence.  Bodily injury liability (BI) insurance is designed to pay for injuries caused to others by the owner’s negligence, but BI insurance is not required in Florida.  Some experts have estimated that 1 in 3 vehicles registered in Florida have no BI insurance whatsoever.

Many of my clients have protected themselves by purchasing uninsured motorist (UM) coverage.  UM insurance is designed to pay for injuries to the owner of the car and its occupants that are caused by the negligence of someone else.  Obviously, if there is insufficient BI insurance maintained by the defendant or insufficient UM insurance maintained by an injured person, the less money he or she can expect to recover.

3. Severity of Injuries

Not all injuries are created equal.  It may sound crass to discuss injuries as being more or less “valuable,” but that’s how the insurance companies evaluate claims.  The more severe the injuries, the more money an injured person is entitled to recover.  Injuries that are permanent are more valuable than sprains and strains that heal within a few weeks or months.  Significant scarring, particularly on the face or other visible portions of the body, are also valuable injuries.  Injuries that require injections or surgery are more valuable than injuries that can be treated with conservative therapy such as chiropractic manipulation.

Sometimes when an accident occurs, the injured person was suffering from a pre-existing medical condition or had previously suffered an injury in another accident.  The insurance companies oftentimes try to blame an injured person’s present condition on one of these pre-existing conditions.  Defense radiologists will testify that most people over the age of 25 have some form of a spinal disc bulge or herniation and don’t even know it.  If an injured person is suffering from pain or receiving medical care for a pre-existing condition at the time of an accident, the injuries caused by the accident will likely be less valuable.  However, a pre-existing condition that is not causing the person any problems, and for which the person has not sought medical treatment for a long period of time, should not significantly devalue the person’s injuries caused by the accident.

Significant gaps in medical treatment generally diminish the value of the claim.  Insurance companies tend to believe that when a person is in an accident and waits a few weeks or a month before going to the doctor, the person probably isn’t hurt that bad.  Also, the general belief is that people who don’t go to the doctor regularly to treat for their injuries are probably not hurt that bad.

4. Medical Expenses

Generally, the greater the medical expenses incurred, the more money the injured person is entitled to recover.  However, only reasonable and necessary medical expenses incurred by an injured person for the diagnosis and treatment of injuries caused by the negligent conduct of another are recoverable.  Unreasonable medical bills are not recoverable.  If a doctor’s fees for services exceed what is customarily charged by other doctors in the area, the excess charges are generally not recoverable.  Additionally, the treatment must be necessary.  If the treatment given by a doctor is not medically indicated, the charges are generally not recoverable.  Doctors often disagree about the appropriate frequency and nature of treatment.  Professional standards of medical practice generally control the determination of whether the treatment was medically indicated.

In addition to medical expenses incurred, an injured person may also be entitled to recover money to pay for future medical expenses.  However, only future medical expenses that are reasonably certain to be incurred are recoverable.  If a doctor has recommended a medical procedure, but the injured person does not have a present intention to undergo the procedure, the expense is generally not recoverable.  If a doctor has indicated that an injured person “might” be a candidate for surgery, the expense is generally not recoverable.  If an injured person stops going to the doctor or stops taking prescribed medications, then future medical expense damages are very difficult to recover.  In automobile accident cases, if the PIP insurance is not exhausted, the defense is entitled to a set-off equal to the remaining available PIP benefits.

5. Lost Income and Wages

An injured person is generally entitled to recover money for lost wages due to time that he or she has to take off work to recuperate from his or her injuries.  Also, any missed work due to reasonable and necessary medical diagnosis or treatment of injuries is generally recoverable.  The same analysis regarding reasonableness and necessity discussed above is applicable here.  Generally, the damages are equal to the number of hours spent recuperating or at the doctor’s office, including travel time, multiplied by the injured person’s hourly compensation rate.  If the injured person typically earns commissions or other non-hourly compensation, the hourly rate is adjusted to include the average commissions earned per hour.  Injured persons who are paid a salary and whose salary is not decreased by their employer for time spent recuperating or at the doctor’s office are generally not entitled to recover lost wages.  In automobile accident cases, the defense is entitled to a set-off equal to the amount payable by the injured person’s PIP insurance, therefore lost income and wages up to $10,000 that were paid by PIP insurance are not recoverable in those cases.  Obviously, the more money an injured person makes at his or her job, the more money he or she will be entitled to recover for any time off. (See also Limits on Compensation).

When the person’s injuries are severe enough to prevent the person from being able to work, the lost earning ability is generally recoverable up to the age of retirement.  The calculation of these damages generally requires expert opinion testimony from an occupational rehabilitation specialist.  If there is any available job that the injured person is able to perform, then the defense is generally entitled to a set-off equal to the earnings that could result from that job, whether the injured person chooses to work or not.  If the injured person is completely disabled and unable to perform any job, then the defense is generally entitled to a set-off equal to the Social Security disability income or other available disability income benefits received.  If the injured person continues to work in the same job or in a better paying job after the event that caused the injuries, then the person generally cannot recover damages for lost earning capacity.

6. Pain and Suffering, Disability, Disfigurement, Mental Anguish, and Loss of Capacity for the Enjoyment of Life

Pain and suffering damages, as they are frequently called, are intended to compensate a person who has been injured by the negligent conduct of another for the intangible effects associated with those injuries.  Pain and suffering damages are generally proven by showing that the injuries prevent the person from engaging in desirable activities or otherwise hinder the person in his or her normal life activities.  Many times, these restrictions involve sports activities, social activities, household chores, personal grooming, and virtually any other activity that the person formerly engaged in.  Proof of pain and suffering is generally proven by the presentation of testimony from the injured person and from “before and after witnesses” (people who know how the incident has changed the injured person’s life activities). 

There is no formula for determining pain and suffering damages.  Generally, the amount of pain and suffering damages a jury is likely to award cannot be reliably calculated and may vary widely depending on the makeup of the jury and the specific facts of the case.  In order to be eligible for pain and suffering damages in an automobile accident case, the injured person must prove:

  1. a significant and permanent loss of an important bodily function
  2. a permanent injury within a reasonable degree of medical probability
  3. or significant and permanent scarring or disfigurement

7. Failure to Mitigate Damages

A negligent defendant is not obligated to pay damages to the extent that the damages were caused or made worse by the injured person’s failure to follow the doctor’s recommendations or failure to seek employment.  If the injured person’s injuries, disability, or disfigurement was caused in part by the person’s failure to do the things that the doctor recommended, then the defense is entitled to have the total damages reduced by the percentage of fault attributable to the injured person’s own unwillingness to assist in the recovery efforts.  This could include missing doctor’s appointments, failing to undergo recommended procedures, and failing to take prescribed medications.  Also, an injured person’s lost wage claim will be reduced if he or she fails to look for or accept a job if employment was a possibility.

8. The Government as Defendant

If the defendant is the State of Florida or any subdivision of state government, the claim is limited to $100,000.  For claims arising on or after October 1, 2011, the limit is $200,000.  Attorney’s fees are capped at 25%.

9. The Identity of the Attorney Representing the Plaintiff

The insurance companies generally know which law firms are willing to file lawsuits and which ones settle all their claims.  Some insurance companies will make lowball settlement offers to see if the attorney is willing to file a lawsuit.  Law firms that routinely file lawsuits are more likely to obtain better settlement offers.

10. Whether a Lawsuit is Filed

Settlements of claims in litigation are generally higher than settlements that occur without the filing of a lawsuit.  However, the attorney’s fees and costs are typically higher as well.

11. Other Accidents

Occasionally, an injured person is involved in another accident while his or her first accident claim is being pursued.  The second accident can complicate the settlement of the first claim.  Many times, the insurance company for the first accident will blame the injuries on the second accident and vice versa.

12. Setoffs

In automobile accident cases, the defense is entitled to a set-off equal to the amount payable by the injured person’s PIP insurance, therefore medical expenses up to $10,000 that were paid by PIP insurance are not recoverable in those cases.

13. Mistakes During the Claim Handling Process

Many people do not appreciate the fact that their actions during the claim handling process can adversely affect the value of their claim.  Depending on the insurance company, private investigators can be employed to dig up dirt on the injured person.  Frequently used investigative techniques include video surveillance and snooping on social networking sites such as Facebook and Myspace.  If you have a low back injury, you shouldn’t be posting photographs of your horseback riding exploits while on vacation.  You also should avoid carrying multiple heavy bags of groceries, climbing ladders, water skiing, and other strenuous physical activities if you are claiming an injury that prevents you from doing such things.  If you apply for a job after your accident, make sure that you disclose your condition to the prospective employer.  Your failure to disclose an injury on a job application can come back to haunt you if the defense discovers it.

14. What Doctors are Used and What the Medical Records Say

Documentation of injuries is critical.  Not all doctors are created equal.  Most doctors are excellent clinicians and do wonderful work for their patients.  However, not all doctors know how to properly handle and document treatment arising from an accident.  Many primary care physicians who routinely handle colds, checkups, cholesterol monitoring, and other general medical treatment are ill-equipped to handle accident injuries.  There are many doctors who specialize in treating people who have been injured in accidents.  Those doctors include chiropractors, orthopedists, neurologists, and pain management specialists.  My recommendation for my clients generally includes doctors whose practices are a blend of accident injuries and managed care.  I do not recommend that my clients treat with doctors who only handle personal injury claims, although many people are successfully treated by those facilities.

Objective findings of an injury are also very important.  These objective findings typically come from testing such as x-ray, MRI, and nerve conduction studies.  Having an MRI that shows a herniated disc or other anatomical injury generally increases the value of the claim.

15. Clients with Felony Convictions or Crimes Involving Dishonesty

Under Florida law, a conviction for a felony or a crime of dishonesty is admissible in evidence to show lack of credibility of any witness who offers testimony in court or at a deposition.  Clients who have such convictions oftentimes face credibility issues, both with the insurance company and with a jury.

16. Punitive Damages

Punitive damages may be warranted as punishment to the defendant and as a deterrent to others.  Punitive damages are warranted if the defendant was guilty of intentional misconduct or gross negligence.  According to Florida's standard civil jury instructions, “intentional misconduct” means that the defendant had actual knowledge of the wrongfulness of the conduct and there was a high probability of injury and, despite that knowledge, he or she intentionally pursued that course of conduct which resulted in the injury.  "Gross negligence" means that the defendant’s conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct.  The amount of punitive damages, if any, to be assessed as punishment against the defendant and as a deterrent to others is in addition to compensatory damages. 

Factors to be considered in determining what punitive damages are appropriate include:

  1. The nature, extent, and degree of misconduct and the related circumstances, including the following,
  2. Whether the wrongful conduct was motivated solely by unreasonable financial gain
  3. Whether the unreasonably dangerous nature of the conduct, together with the high likelihood of injury resulting from the conduct, was actually known by the defendant
  4. Whether the defendant had a specific intent to harm,
  5. The financial resources of the defendant.

Conclusion

Obviously, determining the reasonable value of a personal injury claim is a complicated endeavor.  It is my hope that the foregoing analysis will assist you in understanding the factors that are involved in evaluating your personal injury claim.  I encourage you to consider each of the foregoing sections and apply the facts of your particular claim to factors that will be considered by the defense’s insurance company and/or a jury.

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