Auto Insurance Claims - True Settlement Value Calculation

According to the 2000 U.S. Census Report, on average, approximately 120,000 people a year are killed in domestic vehicular collisions and over 1,850,000 require hospitalization. Most of these accidents result in actionable auto insurance claims because state laws typically require that all drivers carry auto insurance coverage. Mandatory auto coverage became law at the insistence of insurance lobbies, yet these same lobbies allege the resulting increase in auto claims is an abuse caused by policy holders and personal injury lawyers.

Due largely to the success of tort reform, after increasing the number of policyholders dramatically, the insurance industry is now enjoying unprecedented profits from the devaluation of average claim value paid. Insurance industry profits are at an all time high. Average claim value is at a 20 year low.

Measuring Auto Insurance Claims

Until the early 1990's, many carriers estimated an average soft-tissue claim at 3 times medical expenses. No longer. Many carriers today devalue total expenses by alleging diagnostic treatment is not a medical necessity, and further devalue the relevance of remaining treatment to actual cost, up to twice cost, as a reasonable settlement value.

The true settlement value however can only be calculated accurately by assessing trial risk vs. reward for all parties. Expect large variations based on the historical jury verdicts obtained by personal injury lawyers in local communities. For claimants, merely knowing the true settlement value often results in substantial increases in settlements whether retaining a personal injury lawyer or settling the claim themselves.