L.A. Personal Injury Firm Aims to Demystify Settlement Calculations
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Abogados Fuertes – a Spanish-speaking personal injury law firm based in Los Angeles – has announced an initiative to demystify why personal injury clients receive certain offers in the hopes of keeping the public informed if they find themselves in a lawsuit.
While many personal injury clients are advised not to accept insurance company settlements without the advice of California’s abogados de lesiones personales, aka personal injury attorneys, how firms and companies come to an agreement on what’s “fair” has remained an elusive mystery for many. Abogados Fuertes seeks to pull back the curtain to reveal why some clients receive thousands while others get millions.
“It all starts with the type of damages,” said Abogados Fuertes personal injury attorney Martin Kanarek, “Insurance companies begin by adding together the cost of all your medical care related to the accident – hospital bills, rehab, even medical devices like wheelchairs. Then they add the cost of your damaged property. That sum is the baseline for negotiating.”
However, emotional damages are mysteriously absent from this baseline. For non-economic damages, insurance companies often utilize one of three possible methods to determine the compensation for mental or emotional distress.
The “damage formula” is the first method insurance companies may use to calculate settlements for noneconomic damages. In short, this method classifies noneconomic damages as minor, moderate, or severe-to-permanent. For each level, the sum of the client’s medical expenses is multiplied by three, four, or even five times.
Similar to the damage formula, the multiplier method of calculating personal injury settlements is used by insurance companies to put a price on noneconomic damages. Companies will multiply the sum of tangible damages up to five times – usually three times – and the result will be the total settlement offer.
The per diem method is a third way insurance companies calculate settlement amounts. The company calculates how many days the client spends recovering from their injury and multiplies that by a set daily rate. Clients and attorneys can negotiate for a higher daily rate.
Abogados Fuertes emphasizes that every case is unique, and that each method has its benefits and drawbacks.
Kanarek added, “No matter how we get to the settlement amount, it’s always a negotiation. We personal injury attorneys are experts at pushing for more for our clients.”
