The rate of car accidents keeps rising sharply in the U.S. Between 2018 and 2022, the number of fatal accidents increased by more than 16%, reaching a total of 42,795 in 2022 alone. With a skyrocketing number of accidents comes an equally high number of damage claims. In fact, physical damage claims reached a 15-year high in 2023.
Physical damage insurance providers are struggling to keep up with these claims. This is because physical damage insurance doesn’t only cover accidents but also damage due to natural disasters, vandalism, fire, and animal or terrorist attacks. So, while dealing with an increased number of claims due to more accidents, providers also have to focus on other reasons for damage claims.
As a driver, the risk of being involved in a car accident is one crash out of 366 for every 1,000 miles you drive. If you are not seriously injured in the accident, you may have a straightforward claim. However, if you want to claim for physical damage and special damages, you need to know how your insurance provider will calculate your claim.
The Multiplier Method
The multiplier method ranks the severity of an accident. For instance, if someone bumps into your car, and there is minimal damage, the multiplier would be 1 or 2. But if a drunk driver hits you and you suffer severe injuries, the multiplier could be as high as 4. If you caused the accident, the multiplier would be low.
This method helps to calculate pain and suffering by multiplying damages with an established value. Your lawyer will likely use 3 for your case so that you get a reasonable settlement. However, your insurance provider may fight this calculation or try to negotiate a lower settlement.
The factors your lawyer and insurance provider must consider are your recovery time and the severity of your injuries. They must also consider any injuries re-aggravated in the accident. These factors make it clear that you should only claim for severe injuries. Your insurance provider will likely not pay for treatment that it deems unnecessary. For example, if you suffer a Grade 1 sprain in an accident, your provider will refuse to pay for six months of treatment. If you suffer a fracture, then it becomes a different story.
Do not go overboard when presenting your medical bills. Your insurance provider and lawyer won’t care much about insignificant injury charges. And you may not even receive enough of a settlement to cover them.
Your special damages claim may also include emotional and psychological damage stemming from the trauma of the accident. It may include the cost of long-term treatment for severe injuries. Filing a claim for these may be challenging, but your lawyer can advise you on the best course of action.
The Per Diem Method
The Per Diem method applies when insurance providers or lawyers calculate the number of days a victim suffers from injuries. So, if you suffer a traumatic brain injury, your lawyer or insurance provider will assign a value for each day you display symptoms and have pain. This means you will receive a specific compensation amount for each day you cannot work.
For instance, if your medical bill is $2,000 and you lost $500 worth of income, your total loss is $2,500. If the value assigned for each day is $100 and it takes you two months to recover, the calculation is 60 times $100, which equals $6,000.
Calculating Physical Damages After a Car Accident
In addition to special damages, you may also be able to claim physical damages. In this case, your lawyer or insurance provider will calculate repair costs and diminished value. You will need to get a few quotes from certified repair shops to compare the costs.
Also, if your car is worth less after the accident, you can ask for compensation for the loss of value in a separate claim. If it so happens that the cost to repair is more than your car’s pre-accident value, the insurance company will likely consider the accident as a total loss incident.
Filing a Car Insurance Claim
Should you become a part of the U.S. car crash statistics and have to claim, it is essential to know which steps to follow.
If someone hits your car, you can claim from their liability insurance. However, this will not be an overnight payment. The at-fault driver’s insurance company will likely investigate the accident to confirm their client is to blame.
Also, you may not always be able to claim from the at-fault driver’s insurance. In some instances, you would have to claim from your own insurance. For instance, if you live in a no-fault state, you should claim for injury from your own insurance. No-fault states require personal injury protection insurance, so you can only sue the at-fault driver if you meet the state’s other requirements. These include severe injury or death. States without no-fault laws offer PIP and MedPay for injury claims.
Moreover, if the at-fault driver is under-insured or uninsured, you won’t get much compensation from them. You would have to rely on your underinsured motorist coverage in this case.
If you took out collision insurance, you don’t have to deal with the other driver’s insurance company. Your policy will pay for the damage to your car. Just keep in mind that your settlement will be less because of your deductible.
If you have a lawyer, you could sue the driver directly. But you need proof that the accident was their fault and not yours. This means having eyewitness statements, a police report, relevant photos, and even security camera footage.
Understanding Car Accident Claims Makes the Process Easier
If you understand why and how insurance companies calculate claim settlement amounts, it will make the process easier for you to deal with.
In the same way, knowing how the different calculation methods work will allow you to make better decisions as you go through the claims process. It is also the best way to ensure you receive the compensation you deserve after an accident that was not your fault.
