What You Need to Know About Insurance Companies

When filing a personal injury claim, it is best to arm yourself with information on how to deal with insurance companies. Knowing what you'll be getting yourself into would make it a lot easier to get your claims fast and without the stress that usually comes with having a legal battle between you and the insurance company.

Here are some information to help you communicate and negotiate after an injury accident.

The Insurance Claims Process

• The first thing to do before filing a claim is to notify the person or persons who may be responsible for the accident about your being hurt and your intent to file a claim for your injuries. Not only does this increase your chances of getting a quick settlement; it also prevents the cause of your accident to claim later that they were caught by surprise and that they don't know anything about your filing a claim.
• Make a thorough investigation of your claim. You need to prepare all pertinent evidence, establish who's responsible for the accident, determine the worth of your claim, and plan a good argument.
• Write a formal demand letter to the insurance company of the person who you believe is responsible for your injuries. Take note that this may include your own insurance company, if you are covered, for example by a no-fault automobile policy.
• Negotiate with the insurance company until you agree on a settlement you can live with.

It's that simple. Most insurance companies are usually willing to pay in the range that you have forwarded to the company. Nevertheless, when faced with a stubborn or unreasonable claims adjuster, you may resort to more determined negotiation tactics or get the expertise of a lawyer. Or worst case scenario—take your case to court.

Making A Formal Claim For Compensation

Making a formal claim for compensation in the form of a demand letter is a critical element in the negotiation process. It is therefore advised that you write it in a careful and well-thought of manner. Include points that could make a strong impression for your arguments. Include why the insured person is at fault, the extent of your injuries, your medical treatments and costs, your income loss following your accident, other damages you suffered, and if you have no-fault automobile insurance, why you qualify to make a claim against the insured person.

In conclusion, your letter should contain a demand for a lump sum that will settle your entire claim. It is advised that the lump sum be higher than what you are actually willing to settle so that you'll be in a good position to negotiate later.

Computation of the Amount for Compensation

There is a general formula that lawyers and insurance companies use to calculate the range of compensation for an injury. In general, you can expect to be reimbursed based on medical care, lost income, temporary and permanent pain and other physical discomfort, and loss of family, social and educational experiences.

A claims adjuster usually computes the compensation according to a damages formula:

(medical special damage x multiplier) + lost income

The "medical special damage" is the total medical expenses related to the injury plus the general damages which include intangibles such as pain, suffering, and other non-monetary losses. The adjuster then multiplies the amount by a multiplier in the amount of 1.5 or 2 when the injuries are relatively minor, or up to 5 when the injuries are particularly painful, serious, or long lasting. The multiplier may even go as high as 10 in extreme vases. Lastly, the adjuster then adds any income lost as a result of the injuries.

By understanding the formula used, you will be able to get a faster and quicker settlement from the insurance adjuster.

Lastly, you should also remember that your own insurance coverage or paid sick leave from work should not limit your compensation from an accident. It is improper for an adjuster to ask about such payments. One attorney site said it all, "You paid for your health insurance and earned your sick leave or vacation pay; now the insurance for the person who caused the accident has to pay."

(Submitted to Anna Lim via email 012005)