How Do I Value My Personal Injury Claim?

Naturally, curiosity leads an injured party to wonder, “what’s my claim worth?” Although it is quite difficult to pin-point a dollar amount to an injury or injuries, because every case is different — and, I stress VASTLY different — there is a rough methodology. Despite all the variables, there are some constants that we look at in arriving at an adequate or satisfactory settlement for our clients. Let me again preface the below by saying that IN NO WAY are the below factors an “end all, be all” solution. But, rather simply a starting guide in assisting you understand our process. Without further ado —

1. Economic Damages (Special Damages)

These are quantifiable financial losses that the plaintiff has incurred or will incur as a result of the injury.

• Medical Expenses:

  • Past Medical Bills: Add up all medical costs already incurred, including hospital stays, surgeries, medications, physical therapy, and any other treatment directly related to the injury.

  • Future Medical Expenses: Estimate future medical needs based on medical reports and expert opinions. This may include ongoing treatment, rehabilitation, or long-term care.

• Lost Wages:

  • Past Lost Income: Calculate the income lost during the recovery period, including salary, bonuses, and other earnings.

  • Future Loss of Earnings: Estimate the loss of future earning capacity if the injury affects the plaintiff’s ability to work. This may require input from vocational experts or economists.

• Property Damage:

  • If property damage has not been addressed or paid for by an insurer, then include the cost of repairing or replacing any property damaged in the incident.

• Out-of-Pocket Expenses:

  • Include any copays and/or prescriptions, but also include any additional expenses directly related to the injury, such as transportation to medical appointments, home modifications, or assistive devices.

2. Non-Economic Damages (General Damages)

These damages compensate for non-monetary losses that are more subjective.

• Pain and Suffering:

  • This includes physical pain, emotional distress, and mental anguish caused by the injury. You may consider factors like the severity of the injury, the impact on the plaintiff’s daily life, and the duration of suffering.

  • To estimate, some use a multiplier method, where economic damages are multiplied by a number (typically between 1.5 and 5) depending on the severity of the injury. Others might use a per diem method, assigning a daily value to the suffering and multiplying it by the number of days the plaintiff has been affected.

• Loss of Consortium:

  • Compensation for the impact the injury has had on the plaintiff’s relationship with their spouse, including loss of companionship or intimacy.

• Emotional Distress:

  • If the injury has led to significant psychological effects like depression, anxiety, or PTSD, this can be factored in.

3. Punitive Damages

• These are awarded to punish the defendant for particularly egregious behavior and to deter others from similar actions. Alabama does cap punitive damages in most cases, and they are only awarded in cases of willful, malicious, or grossly negligent conduct.

4. Adjust for Liability

• Contributory Negligence: In Alabama, if the plaintiff is found to be even partially at fault, they may be barred from recovery. Ensure that liability is clearly established in favor of the plaintiff. If there is any question of shared fault, adjust the settlement demand accordingly.

5. Consider Insurance Limits

• Review the defendant’s insurance coverage to determine the available limits. The policy limits may cap the amount you can realistically recover, even if the damages exceed those limits.

• Determine the extent of Uninsured/Underinsured (UM/UIM) coverage under your policy. We could write an entire blog series on the importance of UM/UIM coverage. If you don’t know how much you have, find out TODAY. If you only carry state minimums ($25,000 per person/$50,000 in the aggregate), increase it TODAY. It’s one of the smartest, most valuable decisions you can make.

6. Calculate a Settlement Range

• Low-End Estimate: This should cover the bare minimum economic damages with a conservative multiplier for pain and suffering.

• High-End Estimate: This should include the maximum potential economic damages, a higher multiplier for severe pain and suffering, and punitive damages if applicable.

7. Negotiate

• Begin negotiations with a demand at the higher end of your range, expecting some back-and-forth with the defense or insurance company. Be prepared to provide documentation and arguments to justify your demand.

Example Calculation:

• Economic Damages: $50,000 (medical bills) + $20,000 (lost wages) + $5,000 (property damage) = $75,000

• Non-Economic Damages: Using a 3x multiplier = $75,000 x 3 = $225,000

• Total Initial Demand: $75,000 (economic) + $225,000 (non-economic) = $300,000

This amount may be adjusted based on the defendant’s response, additional evidence, or strategic considerations.

Again, this is simply a guide, a rough guide at that, and is not indicative of the recovery in a particular case. Like stated prior, each case is so different, with so many unique nuances, that we strongly encourage you meet with reputable, local counsel to discuss your case or claim, at no charge to you. We’d be honored to help!