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If you have suffered injuries as a result of someone else's or an entity's negligent behavior, you may be entitled to monetary compensation, but how is the final compensation amount determined? What elements are considered when determining the value of the compensation? Below, we explain the factors that influence the calculation of a personal injury settlement.
When an accident occurs and the victim suffers severe personal injuries, the consequences go beyond possible physical or material damage. The financial, work, and emotional stability of this person is also affected, especially because the injuries almost always involve the accumulation of high medical bills that jeopardize their future and that of their loved ones.
Here, the difference between uncertainty and full recovery may come through a settlement that ensures fair compensation for the damages suffered. When an injured person accepts such an agreement, they not only receive a favorable monetary transaction but also resolve their legal claim without having to go through a long, costly, and emotionally exhausting court process.
The value of a personal injury settlement is carefully calculated. The goal is to objectively analyze the real impact of the accident on the victim's life or that of their close relatives in the case of wrongful death. Among the factors that carry the most weight in these decisions, we can mention the following:
The scope of these elements is verified by all parties involved in the legal process through a thorough review of medical and expert evidence, testimonies, work reports, bills, and receipts of expenses related to the injured person's recovery, photographs, and videos documenting the event, among other sources of evidence.
One of the most critical and complex aspects of a legal process seeking compensation for a personal injury victim has to do with determining liability in the incident. Proving that someone was at fault or acted negligently in these cases directly influences the amount of money awarded in the final settlement.
Comparative negligence and contributory negligence are the two legal models used in the United States to assign responsibility after an accident. The first principle, which also applies in Florida and Texas, determines that a person can receive compensation even if they were partially at fault for the incident. It also indicates that the final amount is reduced in proportion to the percentage of fault.
On the other hand, the contributory negligence system is much stricter and states that if the victim had even a minimal part of responsibility (for example, 3%), they may lose the right to receive any compensation.
If, after investigations and the analysis of evidence presented by the involved parties, it is determined that both sides were at fault, the total compensation amount the victim is entitled to is adjusted accordingly. For example, if the injured person is found to be 10% responsible, they will only be able to receive 90% of their total compensation.
The impact of these numbers is so significant in the final resolution of the case that having strong legal representation is essential. At this firm, we have experienced personal injury attorneys capable of crafting an effective strategy to minimize any fault attributed to you as the victim of someone else's or an entity’s negligent behavior.
To maximize the compensation you are entitled to, it is necessary to prove that the other party was truly negligent, or in other words: demonstrate that there was a duty of care, that this duty was breached, and that, as a consequence, you suffered severe personal injuries.
This challenging task can only be successfully accomplished with the support of competent legal advisors who are deeply familiar with every detail and requirement of the law, who monitor the legal deadlines of the process, and who maintain direct communication with you regarding case progress and the proximity of a fair and advantageous settlement.
One of the most influential factors in calculating a personal injury settlement is the policy limit of the negligent party's insurance, precisely because it represents the maximum amount of money the insurer is obligated to pay on behalf of their client, as long as they are covered for the accident in question. But how do these financial limits really work?
It is important to explain that each insurance policy, whether auto, commercial coverage, or liability insurance, has limits established in the contract, which are usually divided per person and by type of incident. For example, an auto liability policy in Florida may have a limit of $50,000 per person and $100,000 per accident
This means that even if the actual value of the claim is higher, the amount the victim will receive is determined by those limits, simply because the insurer will not pay beyond that cap. Now, what legal resources protect the injured person in this specific case?
Another option in which our personal injury attorneys can assist you is negotiating with medical providers to structure agreements that contemplate staggered payments over time. In this way, the final settlement amount will be less affected by these debts.
In the process of calculating compensation for the pain and suffering endured by a personal injury victim, specific methods are used that combine mathematical and logical criteria. These approaches seek to translate subjective experiences into clear and justifiable figures to achieve a reasonable and coherent assessment within the legal context.
One of the most popular approaches used by both insurance companies and personal injury attorneys is the so-called multiplier method, in which the total actual medical expenses of the victim are multiplied by a factor ranging from 1.5 to 5, depending on the severity of the injuries.
For example: if the medical expenses total $35,000 and the injuries are moderately serious, this amount is multiplied by three, resulting in a total value of $105,000. In some cases, when injuries are very severe, the multiplier factor can exceed 5.
This method, as its name suggests, assigns a fixed daily rate to compensate for the suffering experienced by the injured person each day. It takes into account all the days from the moment of the accident until the end of the recovery. If each day is assigned a value of $100 and the victim takes 150 days to recover, the final compensation amount will be $15,000.
We are thus dealing with a more personalized approach. However, both methods take into account the severity of the injuries, the rehabilitation time, long-term effects, or the occurrence of some form of permanent disability, and the impact of the accident on the victim's daily life.
As we have analyzed, the attorneys of the parties involved in the accident and the insurer representing the defendant resort to internal formulas such as the multiplier method or the daily rate to determine the real value of the compensation. In addition to these mathematical approaches, they follow technical criteria and interpret specific documentation to fairly evaluate the physical, emotional, and economic harm suffered by the victim.
Other factors involved in determining the total compensation amount may include the following:
It is important to emphasize that beyond formulas and criteria, the role of insurers is to pay the least amount of money possible. Only with the support of one of Gallardo Law Firm’s talented personal injury attorneys will you be ready to aggressively negotiate with these large companies.
Our professionals have extensive experience handling the necessary documentation to demonstrate the devastating impact of the injuries on your life. Among the most crucial evidence, we can mention the medical history, test results and prescriptions, witness testimonies, police reports, photos, and videos of the injuries, pay stubs showing lost income, and employer letters supporting the reduction in earnings.
In the U.S. legal system, legal precedents — that is, decisions made in previous similar cases — play a fundamental role in any legal situation, including personal injury cases, where these precedents directly influence payment expectations during a settlement negotiation.
But what exactly are legal precedents? They are prior court rulings that build the legal foundation of various situations based on their similarities and how those characteristics influence the issuance of a verdict, whether the case was resolved in court or through the negotiation of a fair settlement.
Let’s give an example: if a medical negligence victim has injuries similar to yours and previously received compensation of $105,000 within the same state or jurisdiction, your attorneys can use that precedent as a starting point in negotiations with the defendant’s insurer.
In personal injury cases, many claims are resolved before going to trial, through out-of-court settlements between the affected party and the insurer or the defendant’s attorneys. In many of these cases, the potential outcome in court influences the willingness of the parties to continue negotiating.
On the one hand, the plaintiff’s attorneys may use this scenario as a pressure tool and argue that, if the process ends in a trial, the jury could award an amount even greater than what the defendant is offering. Insurers, in turn, consider the bad publicity of a lawsuit, as well as the time and resources they would have to invest long term.
It is common that, during the process of claiming personal injury compensation, unrealistic and incorrect expectations are formed about how these cases work. Debunking some of the myths that circulate on social media and in the news is also a way to offer updated and accurate information on a matter of vital importance. Some of these misconceptions include:
This way of thinking, sometimes fueled by sensationalist news or other people's experiences, can lead to frustration and distrust in the legal system and in your attorneys’ work. It also makes people vulnerable to accepting the first offer from insurers and ending up with low compensation that barely covers the damages caused by the accident.
Negotiating with insurers, ensuring that emotional suffering and physical pain are properly calculated, and making sure you receive fair compensation is the mission of our firm's personal injury attorneys. Without legal representation, insurance companies will try to take advantage of your lack of knowledge on the matter and even blame you for the accident.
Our professionals will not rest until your rights and the well-being of your loved ones are adequately protected. To achieve this, they focus on a strategy that:
Our legal team works with medical experts, accountants, and specialists when necessary, with the goal that every detail adds value to your case. And the best part: we are prepared to face any obstacle that may arise and to accompany you throughout the process, from filing the claim until the final check is in your hands.
Have you suffered an accident and are not sure how much compensation you might receive? Do you have doubts about whether the insurer’s offer is fair? At Gallardo Law Firm, we are available to answer these and any other questions you may have. It’s as simple as picking up the phone today and calling (305) 261-7000 (Miami), (786) 800-9356 (Hialeah), or (713) 587-6370 (Houston, Texas) to schedule a first consultation completely free of charge.