Posted on: 11 July 2017

After you're involved in a vehicle accident, you'll typically receive a settlement offer from the auto insurance company responsible for paying your damages and losses. One of the major challenges you'll face when you receive this proposal is determining whether it is a decent one or a low-ball offer that doesn't actually fully compensate you. Here are three issues you should look at to help you decide if the settlement offer you get is fair.

It Covers Your Compensable Damages

First and foremost, the amount offered should cover compensable damages. This is the actual money you lost or you had to pay for expenses incurred due to the accident. Medical bills are a compensable loss as is any wages you couldn't earn because you had to take time off to heal from your injuries. Damage to your vehicle and the items inside of it also count. Basically, anything tangible you can back up with a receipt would be considered a compensable damage.

To ensure this part of the settlement properly reimburses you for these losses, tally up all the invoices and receipts for items you've already paid. Add in any wages you lost as well as the amount of money it would cost to repair/replace your vehicle and the items inside of it that were damaged (e.g. your laptop). The number you get should be close to the offer amount for compensable damages. If it isn't, then you need to determine what's not being paid or why the insurance company may be low-balling you in a particular area (e.g. giving you less money for repairs than expected).

It Compensates You for Pain and Suffering

If you were physically hurt in the accident, you are generally eligible to receive compensation for any pain and suffering associated with those injuries. However, this part of the settlement can be difficult to accurately calculate because it's hard to objectively measure something as subjective as pain levels.

However, insurance companies use a couple of different methods to calculate pain and suffering, which you can also use to estimate whether this part of your settlement is fair. The first method multiplies your compensable damages by a number between 1 and 5 to arrive at a sum. The multiplier corresponds with your pain level, with 1 being the lowest level and 5 the highest. If you have $2,000 in compensable damages and your pain level was a 2, the total amount you would receive for pain and suffering would be $4,000 (i.e. $2,000 x 2).

The second method involves multiplying a base amount (e.g. your daily wages) by the number of days you were in pain. If you were in pain for 10 days and the base amount you charge is $100, you would be entitled to $1,000 for pain and suffering.

You'll probably get very different numbers using either method. It's best to use both to get a range. If the amount the insurance company offers you lands in that range, then it's probably a fair offer.

It Provides Money for Long-Term Issues

The last thing you need to consider when looking at the insurance company's offer is whether is provides money for long-term issues, such as future medical expenses or reduced earning capacity due to a permanent disability. Sometimes the insurance company will use a high multiplier when determining your payment for pain and suffering to include long-term issues. In other cases it will be a separate issue you'll need to negotiate with the company about.

In either case, you'll need to discuss your long-term issues with the appropriate experts to determine how much money you'll need to cover your expenses and losses. For instance, you should talk to your doctor about any future medical treatments you may need and the associated cost so you have a number you can compare to the insurance company's offer.

For help with determining if you're getting a good deal from the insurance company or assistance with a car accident case, contact an attorney like Carl L. Britt, Jr.