Just about every personal injury or wrongful death case is paid by insurance companies. Whether it is a settlement before trial or the payment of a verdict after trial. Therefore the starting point of any discussion of what a particular case is worth is how insurance companies value these cases in going about negotiating with the injured party to resolve the matter short of a trial.
Insurance companies do not have to settle a case. All the injury victim has a legal right to is to have 6 or 12 jurors tell him or her and the insurance company what the value of the case is in their collective eyes. As a result, valuing personal injury and wrongful death cases becomes somewhat of a guessing game for the insurance company and the plaintiff.
Because a jury trial is the ultimate destination for any case if it is not settled, insurance companies typical value cases based on what they believe a jury would award the plaintiff for the case if it were tried. Quite frankly, this is how plaintiffs should value their case as well to maximize their settlement potential.
What the insurance company perceives the value of the case to be at trial is called its “exposure.” It is exposed to a potential payout of that amount in its eyes. The insurance company wants to avoid having to pay its “exposure” by being forced to try the case to a jury. Plaintiffs should want to avoid being told by a jury that the case is worth less than what he or she believes is a fair value for the case. Each side is trying to avoid a bad result at trial.
You may be wondering how the insurance company assesses its “exposure” if it is based on how other individuals (jurors) that we do not know would value the case? There are actually several items used by insurance companies and plaintiffs’ lawyers to place a value on a personal injury case, all of which are viewed through experience in trying these types of cases.
1. Actual Expenses: What are the plaintiff’s actual losses for such things as past and future medical expenses, lost wages or future ability to earn a living?
2. Pain and Suffering Damages: The value placed on the amount of pain and suffering experienced as a result of your injuries, including how the injuries, pain and limitations experienced affected one’s daily life. This is the area of value that is the most difficult to predict and where there may be the most disagreement between the insurance company and the plaintiff.
3. Where Case Will Be Tried: Believe it or not, jurors in certain counties in Georgia tend to value personal injury cases higher than jurors in other counties. Where the case is tried plays a significant factor in how the first two factors are valued.
4. Likability of Injured Party: Jurors tend to award more money to a plaintiff who is injured that they like and therefore can sympathize with than a plaintiff who is not likable for some reason. Again, this plays into how the first two items above are valued by jurors and therefore insurance companies.
5. The Defendant: Who the defendant is has been shown to affect how jurors value a personal injury case as well. If the plaintiff is suing a large corporation, jurors tend to award more for the injuries than if the plaintiff is suing an individual.
At the end of the day, insurance companies look at all of these items together in valuing your case. They look at the hard numbers of what your actual expenses are and then analyze how they feel a jury will value your pain and suffering based on such things at items 3-5. Trial lawyers do this as well. The value derived by each side may be very different.
The bottom line is that neither the insurance company or the plaintiff or his or her lawyer has a crystal ball and therefore knows the exact value of your case. Each side can only go off of prior experience in the courtroom trying similar cases to jurors to get an idea of what a jury may do in your particular case. This is why hiring an experienced personal injury lawyer for your case is very important. You do not want to leave money on the table.