Insurance companies have what they think is an auto accident pain and suffering settlement calculator.
It’s a computer program. The main one is called Colossus. It’s believed to be used by many of the largest insurance companies in the country including Allstate, Aetna, Erie, The Hartford and USAA.
Insurance companies that defend its use argue that Colossus makes injury claim settlements consistent and takes the guess work out of evaluating claims for settlement. (Another benefit, that the insurance companies don’t publicize, is that it results in lower settlement payouts.)
Colossus considers such things as the age of the injured person, where the injury occurred, the reputation of the injured person’s lawyer (if there is one) and, of course, the nature of the injuries.
Different insurance companies use their computer programs differently. Some use them to establish the amount they will pay for a pain and suffering settlement and they stick to that figure. Others use the computer result as a tool to be used, along with other considerations, by the person evaluating the claim and deciding how much to pay. Generally, however, less experienced claims adjusters are required by all of the companies to stick closely to the Colossus evaluation.
One problem with Colossus and the other similar programs is that it is based on the information put into the program by the operator. In other words, garbage in, garbage out. If all of the symptoms aren’t accurately considered, there is a different result than there would be if the symptoms were accurately entered.
Another problem is that it is based on statistical averages and your case may not be average.
Still another problem is that no computer program knows anything about the individual that was injured. It doesn’t know, for example, how that person tolerates pain, what their usual activities are and how their life was affected by the injuries. And these are the very things a judge or a jury will consider if the case ends up in court.
So, you need to know that the insurance company you are dealing with thinks it has an auto accident pain and suffering settlement calculator in Colossus or their version of it.
Hopefully, you will be dealing with an insurance company that recognizes the problems with Colossus that I just explained and will not be limited by the computer’s evaluation.
If the insurance company gives discretion to its claims representative, and does not tie the representative’s hands with the computer program result, there are at least two other common ways to calculate auto accident pain and suffering settlements.
Multiple Of Specials Claim Evaluation Method
No one admits it, but a common method for determining the settlement value of a claim is to multiply the “special damages” (financial losses such as medical bills and lost income) times some multiplier to arrive at the total claim value.
In routine cases, multipliers range from 1 ½ to 3, or occasionally to as much as 5. For example, if the special damages are $5,000 expect an adjuster using this approach to offer somewhere between $7,500 (1 ½ times $5,000) and $15,000 (3 times $5,000).
Per Diem Claim Evaluation Method
In my opinion, the best auto accident pain and suffering settlement calculator is the per diem approach.
This common sense method assigns a value to each day (that’s what per diem means) or each week or month – some period of time – and then adds those values up. Under this method, a certain amount would be assigned to each month of pain and suffering and the total for pain and suffering would be added to the financial losses to arrive at the total settlement.
For example, if the injured person was treated for her injuries for 4 months and you decided that $3,000 per month was fair compensation for dealing with the injuries, the pain and suffering settlement amount would be $12,000. By adding that amount to the amount of the medical bills and lost income, you arrive at the total settlement value. So, if the medical bills and lost income were $5,000, for example, that would be added to the pain and suffering calculation of $12,000, yielding a total settlement value of $17,000.