I started my career working for the largest insurance defense law firm on the West Coast. I spent three years working directly with insurance adjusters as they evaluated cases, and determined whether to cover an insurance claim submitted by one of their insureds. After this experience I was offered a position working directly for one of the largest insurance companies in the United States—a company that collected over one-third of a trillion dollars in insurance premiums in 2017. Though I worked with that company for only one and a half years, I gained a deeper appreciation for how these companies determine the value of a personal injury claim.
It should come as no surprise that these evaluations are almost always “business decisions.” To me, my clients are people with real injuries and problems. To insurance companies, all too often my clients are claim numbers with diagnoses codes and “alleged” symptoms.
To illustrate, many insurance companies are using a computer program called “Colossus” to statistically evaluate claims based on factors they claim mathematically “determine” the value of a claim. Using a complex algorithm, Colossus computes this value after several variables are entered by the insurance adjuster. For example, using medical records and diagnosis codes, Colossus assigns a value to a bodily injury claim. It awards higher values for injuries like broken bones and lower values for injuries like whiplash. This value might be increased if the injured person immediately sought medical attention immediately following the collision or decreased if there was a short delay in treatment. Similarly, Colossus uses the amount of property damage caused to cars in a collision to determine claim value. More damage means more value. Less damage means less value. This software is so effective at reducing the value of a given claim, that in its sales literature distributed to insurance companies, Colossus claimed that “the program will immediately reduce the size of bodily injury claims by up to 20 percent.”
Insurance company adjusters may also use general, and inaccurate, rules of thumb designed to mathematically determine the amount of pain and mental anguish an accident victim may have suffered. Many times this takes the form of a ratio of 1 to 1/2 or 1 to 1 relationship. For example, a claims adjuster may say that because a person had $5,000 in medical bills, that $2,500 is an appropriate calculation for pain and suffering. These types of general rules, of course, do not take into account the nature of an injury. For example, one client who may have died as a result of a car crash, might only have a few thousand dollars in medical bills—no one would argue that the loss to his or her family is only a few thousand dollars. Similarly, a client who was made a paraplegic might have a couple of hundred thousand dollars in medical bills but could have a claim relative to his pain and suffering much, much larger than that.
Stated simply, even as a professionally trained and experienced personal injury attorney, I tell my clients, and prospective clients that determining what their case is worth is much more complicated than is possible in a phone call or after a quick review of medical records. There are so many variables that can affect the value of a claim that are impossible for computers, and uninterested/unmotivated insurance adjusters, to quantify from the approaches identified above. The only real way to get a fair and reasonable evaluation of your claim value is to meet and discuss it with an attorney and to ask him or her to do a full work-up. Because most personal injury attorneys in Southwest Washington, including us here at Schauermann Thayer, work on a contingent basis—meaning they don't get paid unless and until they recover for you, most will only be willing to do this sort of analysis after entering into an attorney-client relationship with you.
If you have questions about a case or about what your claim may be worth, we invite you to call one of our attorneys to discuss the specific facts of your claim and the nature and extent of the harms and losses you suffered.