“How much is my case worth?”
If you’ve been hurt and are thinking of bringing a personal injury (PI) claim, it’s one of the first questions on your mind. In most cases, no one can tell you, with any real certainty, that your claim is worth a specific amount. But an experienced attorney—one who’s familiar with the courts, juries, and claim valuation practices in your area—can give you a fairly reliable range of values.
This article walks you through the claim valuation process. When you’re done, you’ll have a basic understanding of how claim values are calculated.
What Factors Affect the Value of Your Personal Injury Claim?
Lots of factors influence the value of your personal injury claim. We can’t review all of them here, so we’re going to focus on five of the biggest ones:
- your injuries, including the treatment you receive and your recovery
- whether you were partially at fault for the accident that caused your injuries
- the “likeability” factor, for both you (the “plaintiff”) and the person you’re suing (the “defendant”)
- the risks of going to trial, and
- whether there’s insurance to cover your claim.
Your Injuries, Treatment, and Recovery
This combination of factors is the starting point in valuing your personal injury claim. Here are the valuation rules of thumb:
- “hard” injuries have greater value than soft tissue injuries
- “conventional” treatments add more value than “nontraditional” treatments, and
- long-term or permanent injuries, disabilities, and disfigurement are worth more than a complete recovery with no future problems.
Hard Injuries vs. Soft Tissue Injuries
Valuing your claim begins with your injuries. For our purposes, injuries fall into one of two categories.
“Hard” injuries are those we can see or that show up on an X-ray or CAT scan, including:
- broken bones
- dislocations
- torn cartilage, ligaments, tendons, or muscles
- open wounds
- closed wounds that bleed internally, and
- injuries to the bones and other structures of the spine.
People understand and sympathize with injuries they can see. Everyone knows that they hurt, require medical care, and take time to heal.
Soft tissue injuries—like ligament strains, muscle sprains, and whiplash-type injuries—by contrast, are invisible. They’re easy to dismiss as minor inconveniences that will heal quickly on their own. We’ve been conditioned to look unfavorably at those who make claims for soft tissue injuries.
Here’s the general rule: Hard injuries are worth more than soft tissue injuries. A jury will award more for a broken ankle than a sprained ankle. You’ll get a higher settlement for a torn ligament than for a ligament sprain.
Conventional Treatments vs. Nontraditional Treatments
The kind of treatment you get for your injuries can influence the value of your claim. Conventional treatments like surgery, physical therapy, and medications ordered by licensed physicians (M.D.s and D.O.s) are seen as “legitimate” treatments for “real” injuries.
Treatments from less mainstream practitioners—acupuncturists, massage therapists, and chiropractors, to name a few—might be viewed differently. Some insurance adjusters see them as “fake” treatments for questionable or nonexistent injuries, used to inflate the plaintiff’s medical bills.
Long-Term or Permanent Injuries and Disabilities
Unsurprisingly, long-term or permanent injuries, disabilities, or disfigurement mean your case is worth more than if you’ve made, or are expected to make, a complete recovery. Why?
You’re more likely to need future medical and supportive care for ongoing injuries and disabilities. Long-term disabilities might make it impossible for you to work, meaning you can recover future lost wages. Finally, permanent injuries and disabilities can mean a lifetime of pain, suffering, and emotional distress—for which the defendant must pay.
By contrast, if your injuries heal completely and leave you with no permanent disability, you have no reason to anticipate future medical costs or lost income. Your losses end when your recovery is complete.
Whether You Were Partially at Fault
In most personal injury cases, legal responsibility for someone else’s injuries depends on who was at fault for the accident. Plaintiffs are sometimes partially at fault for their own injuries. If that’s your situation, your fault will impact the value of your claim.
How your degree of responsibility for your injuries impacts your case depends on the state where you live. In most comparative fault states, the value of your recovery (jury verdict or settlement) will be reduced by your portion of the overall fault for the incident in question. In a few other states, you can’t collect anything if you’re more than 50% at fault for your accident. In a small handful of states, called “contributory fault” states, if you share any blame for your accident (even 1%), it wipes out your claim entirely.
The Likeability Factor
In deciding whether to settle a case and what a fair settlement would be, insurance adjusters and lawyers consider what would happen if the case went to trial. They think about how a jury would probably view you and the defendant, which is why likeability plays into case value.
Healthcare malpractice cases are a good example. Juries love healthcare providers, particularly doctors and nurses. Children and the elderly also make sympathetic parties.
Courts instruct jurors not to allow sympathy for a party to influence their deliberations. Jurors try their best to be impartial, but it’s natural to feel a connection with a sympathetic party.
Risks of Trial
Taking a case to trial is always a risky proposition. In general, there are two trial risks involved: The judge and the jury.
Judges are human and they have biases just like anyone else. Most do a good job of keeping their personal feelings in check. Even so, you might find yourself in front of a judge whose biases run in favor of your opponent. If that happens, your case becomes much harder to win.
Here’s the first rule of juries: You never know what they’re going to do. Juries often get it right, but not always. And in most cases, once the jury has decided on a verdict, you’re stuck with it.
Both sides of a case—plaintiff and defendant—would rather avoid these and other risks of trial. That’s precisely why most personal injury cases settle. Better to control the risks you can than roll the dice on risks that might control you.
Whether There’s Insurance to Pay Your Claim
Insurance can play a big role in valuing your case—if there’s not enough of it.
Here’s the rule: Your case is worth whatever you can collect for it. In most cases, if the defendant is uninsured, your case has little or no value. If the defendant is underinsured, the value of your case is equal to whatever insurance the defendant has.
But there’s at least a little nuance to that rule.
Car accidents. If you’re in a wreck with an at-fault driver who’s uninsured or underinsured, and you carry your own uninsured or underinsured motorist coverage, you can look to your own insurance to collect for your losses. (Learn more about different auto insurance coverages.)
Health insurance. If you have health insurance, you can use that coverage to pay for your medical bills even if the defendant is uninsured. It won’t cover your lost wages, pain and suffering, or property damages. And you might have an out-of-pocket deductible. But if your medical costs are substantial, it’s better than having no source of payment.
Seizing assets. In theory, it’s possible to seize an uninsured or underinsured defendant’s assets, liquidate them, and use the proceeds to get paid the money that they owe you. Faced with that prospect, though, most defendants simply declare bankruptcy. When that happens, you stand at the back of the collection line with all the defendant's other unsecured creditors. You’ll be lucky to get pennies on the dollar.
How Personal Injury Case Values Are Calculated: 6 Steps
Now that we understand the most important case valuation factors, let’s see how the calculations are done. We’ll use these facts for our calculations.
You’re a retired military veteran. In your spare time, you volunteer with a local charity, driving those without transportation to medical appointments. One afternoon you were on your way to pick up a passenger who needed a ride to a doctor’s appointment. Another driver ran a red light and broadsided you. You suffered a badly broken left leg.
After the necessary surgery, you developed arthritis in your left ankle. Your doctor tells you the arthritis will progress with age and one day you might need a cane or other assistive device to get around.
Your past medical bills total $24,000. Let’s assume future medical costs associated with your arthritic ankle, including the costs of medical devices, will be $2,000. Because you’re retired, you have no lost wages.
Step 1: Calculate Your Compensatory Damages
Compensatory damages, as the name suggests, are damages to compensate you for your injuries, both physical and emotional. Compensatory damages come in two kinds: Special damages (also called “economic” damages) and general damages (also called “noneconomic” damages).
Special Damages
Special damages compensate you for out-of-pocket losses like medical expenses, lost wages, and the cost of medicines or medical equipment. In our example, you have past and future medical expenses totaling $26,000. These are your special damages.
General Damages
General damages are intended to make you whole for “intangible” losses like pain and suffering, emotional distress, lost enjoyment of life, and disability. The problem with these damages is that they’re hard to quantify.
Lawyers and insurance adjusters often use a formula that applies a multiplier to your medical expenses to arrive at an approximate value. The multiplier is a number, typically ranging from 1 to 5. The number used in any case depends on your injuries, treatment, and recovery.
Our example case involves a serious injury that required surgical repair. Your recovery was good but you’ve got a fairly minor disability that can be expected to progress over time. To calculate a starting point for your general damages, we’ll use a multiplier of 4. Here’s the calculation: $26,000 x 4 = $104,000.
When we total your special ($26,000) and general ($104,000) damages, your compensatory damages come to $130,000. We might need to adjust this figure up or down, depending on the remaining factors.
Step 2: Reduce the Value for Your Share of Fault
The facts give us no reason to think that you were partially to blame for the collision. No adjustment for your fault is necessary.
But let’s suppose, simply to illustrate, that the facts indicated you were 10% to blame for the collision. In that event, assuming you were in a comparative fault state, you’d need to reduce your compensatory damages by 10%, or $13,000. After deducting your share of the fault, the value of your case would drop to $117,000 ($130,000 - $13,000).
Step 3: Adjust for the Likeability Factor
The facts tell us that you’re a retired military veteran, which enhances your likeability. In addition, you were doing charitable volunteer work at the time of the wreck, also a plus factor. Let’s estimate that these considerations add 5% to the value of your case. Five percent of $130,000 is $6,500, bringing the value of your case to $136,500.
Step 4: Adjust for Risks of Trial
As personal injury cases go, our hypothetical case is about as risk-free as they come. Even so, there’s no such thing as a completely risk-free trial. To account for this risk, we should reduce the value of your case by 10%, or $13,650, to $122,850.
Step 5: Determine Whether There’s Insurance
In an ideal world, the defendant has an auto liability policy with coverage limits of $250,000 per person and $500,000 in the aggregate. This would mean there’s $250,000 of insurance coverage for your claim. Your claim would still be worth $122,850.
If the Defendant Is Uninsured
What if the defendant is uninsured? If your case involved a slip-and-fall claim, you’d likely be out of luck. No insurance would mean your case probably has no value. But since our example involves an auto accident, you might be able to look to your own auto insurance.
If you have uninsured motorist (UM) coverage, you can bring a claim against your own policy. In that event, the value of your case depends on the amount of your coverage. If you’ve got a $250,000 UM policy, your case is still worth $122,850. If you’ve only got $100,000 in coverage, then your case is probably worth $100,000.
If the Defendant Is Underinsured
What if the defendant has $25,000 in liability insurance to cover your accident? In that event, the defendant is underinsured. If you don’t carry underinsured motorist (UIM) coverage, the value of your case is $25,000.
But if you’ve got a $100,000 UIM policy, your case is still worth $122,850. The defendant’s liability coverage takes care of the first $25,000, and your UIM policy picks up the remaining $97,850 ($122,850 - $25,000).
Step 6: Calculate a Range of Case Values
If we assume that there’s enough insurance to cover a jury award in your favor, then we can arrive at a reasonable range of case values. Our calculations to this point have left us with an estimated value of $122,850. For ease of discussion, let’s round that up to $123,000.
Because there are many other factors that influence case value, we can’t simply say that your case is worth $123,000. It’s more accurate to say that your case probably falls within a range of values.
For instance, on the low side, we might subtract 20% ($123,000 x 20% = $24,600) from our estimate. On the high side, we can add 20% to our estimate. This leaves us with a valuation range of $94,800 to $147,600.
You’d want to begin settlement negotiations at a figure greater than $147,600. But based on our case value calculations, you should consider any settlement offer in or above that range.
The Personal Injury Claim Settlement Process
Most personal injury claims settle without the need for a trial. Both sides want to avoid the risks of a trial. Trials are not only risky—they’re expensive too.
The Demand Letter and Negotiations
In most cases, the injured party begins the settlement process by writing a settlement demand letter. This letter describes the facts, explains why the other party is legally responsible, details the injured party’s injuries and damages, and demands a specific sum to settle all claims.
The defendant’s insurance company almost always rejects the initial demand and offers a significantly lower amount to settle. The parties then haggle back and forth, usually meeting in the middle. If they can’t agree on a number, the parties prepare for a trial. The case can settle during trial preparation or even during (or after) the trial.
When Will You Get Paid Your Personal Injury Settlement?
If you’re able to settle your case, you’ll probably get paid within a few weeks. Once the parties agree on a settlement amount, a settlement check will be sent to you or your lawyer. If you’ve got outstanding medical bills from the accident (which turn into “liens”), those might have to be paid out of your settlement proceeds. Negotiating and paying off those bills can slow the process down a bit.
It’s a different story if you take your case to trial and you get a jury verdict. Chances are that the other side will appeal. Depending on the outcome of the appeal, your case could be tied up in the courts for months or years. This is another reason why settlement is generally preferable to trial.
There is No Typical or Average Personal Injury Settlement
No two personal injury claims are alike, and the factors that determine case value vary from case to case. For this reason, there’s no such thing as an “average” case value or “typical” settlement amount. The fact that someone else’s auto accident or defective product case settled for a particular amount usually tells you little or nothing about the value of your car accident or defective product claim.
When You Should Hire an Experienced Personal Injury Attorney
Here’s one more key factor that can significantly affect your case value: who’s representing you? If you decide to handle your claim on your own, you’re almost certainly leaving money on the table. An experienced personal injury lawyer will normally add significant value to your case.
Why? Because an experienced lawyer knows about the judges, juries, and case valuation practices in your area. In addition, insurance companies know PI lawyers and their reputations in the local legal community. A lawyer who isn’t afraid to take a case to trial is one that an insurance company has to take seriously. Having a respected attorney in your corner means your case is more likely to settle, and to settle for more money.
If your case is simple, your damages are clear and fairly minor, and there’s no real room to argue about whether you were partially responsible, then you might be able to resolve it by yourself. (But prepare for the insurance company to try to take advantage of you.)
If there are complex legal issues, the facts are complicated, or your injuries are severe or catastrophic, your best result will come from hiring an experienced lawyer.