Types of Compensation After an Auto Accident

After a car accident, you might wonder what type of compensation you can receive. Types of compensation available to you will vary depending on the type of accident, your injuries, and the insurance policies involved.

In general, accident victims can seek to recover compensation for both economic and non-economic damages, although some types of compensation may be subject to Arkansas tax.

Economic damages include anything easy to quantify. They’re based on financial losses and evidence, such as receipts and bills, including medical expenses, car repairs, and lost wages.

Non-economic damages include anything that is not easy to quantify, resulting in damages, including pain and suffering and decreased quality of life.

Each insurance company is different, but there are some general guidelines about what kinds of damages your policy will cover. Here’s a rundown of the most common types of coverage and how they can impact your claim:

Liability Insurance

This type of coverage will usually pay for damages caused by your negligence. For example, if you cause a car accident, your liability insurance would cover the other driver’s medical expenses and property damage. If you wish to pay for your own medical costs after you cause an accident, you can purchase an additional Personal Injury Protection (PIP) policy in Arkansas.

Collision Insurance

This coverage will help pay to repair or replace your own vehicle if damaged in an accident. You’ll likely have to pay a deductible before your insurance company covers any repairs, whether you have collision coverage. It does not pay for damage done to your vehicle that is not related to driving, nor does it cover damage to another person’s car.

Comprehensive Insurance

This coverage protects you from damages not caused by a collision, such as theft, vandalism, or weather damage. Like collision coverage, you’ll usually have to pay a deductible before your insurance company covers any repairs. This type of insurance is optional in Arkansas. However, many lenders require it.

UM/UIM Insurance

UM/UIM stands for “uninsured/underinsured motorist” coverage. If you’re in an accident with a driver who doesn’t have insurance or doesn’t have enough insurance to cover the damages, this coverage will kick in to help cover the costs. In Arkansas, UM/UIM insurance is optional. However, it is a valuable policy to purchase because many drivers are underinsured.

Keep in mind that each insurance company is different, so it’s important to read your policy carefully to understand what kinds of damages are covered. If you’re ever in doubt, you can always reach out to your car accident attorney for clarification.

When insurance adjusters determine the value of a claim, they begin trying to look for any way to deny or reduce your compensation. They must look for ways to pin some blame on you or claim that you had a pre-existing injury.

When calculating the value of a claim, they typically use one of three methods: the multiplier method, the damage formula, or the per diem method. Your Arkansas car accident attorney can review these methods with you and help you understand the true value of your claim.

The Multiplier Method

The multiplier method is the most common way that insurance adjusters determine the value of a claim. The adjuster will take the total amount of damages and multiply it by a factor to determine the final payout amount. The factor can be based on the severity of the damages and the policy limits.

For example, suppose you suffered injuries in a car accident in Arkansas and racked up $10,000 in hospital bills and medical expenses. The insurance adjuster may decide to multiply the medical expenses by 3 to help them arrive at a starting point for negotiations. Using the multiplier method, they will determine your pain and suffering to be $30,000. Any settlement they offer will factor in this amount, plus compensation for the medical bills and any additional lost wages.

Limitations of the Multiplier Method?

There are limitations and disadvantages to using the multiplier method, as with any process. While it may be pretty straightforward, it is inconsistent. An accident victim with a spinal cord injury could find one adjuster using a multiplier of three, while another may use a multiplier of two.

In addition, the multiplier method only looks at medical bills and other tangible bills. It fails to consider an accident victim’s true pain and suffering and living circumstances. A victim who owes less medical expenses may experience more pain and suffering.

For example, a surgeon who suffers a hand injury may have significantly more pain and suffering because of their inability to continue in their chosen profession than someone who works a desk job. Pain and suffering are unique and should be calculated to accurately reflect the victims and their suffering.

The Damage Formula

The damage formula is another way that insurance adjusters may determine the value of a claim. The adjuster will calculate the cost to repair or replace the damaged property with this method. They will then subtract any depreciation from that amount to get the final payout figure.

The Per Diem Method

The per diem method is typically used for claims where there is a loss of use of the property. With this method, the insurance adjuster will calculate the daily rate for the loss of use and multiply it by the number of days the property was unavailable. This will give them the final payout amount.

It is important to note that insurance companies will often use different methods to determine the value of a claim, so it is difficult to say definitively how much a claim may be worth. However, understanding how insurance adjusters determine the value of a claim can help you better understand what to expect from your insurance company when you file a claim.

We’ve all seen the car accident settlement calculators online. You enter some basic information about your accident, and boom – you have an estimated value of your claim.

But how accurate are these calculators?

The truth is, they’re not very accurate and can be misleading.

Here’s why:

If you’re like most people, you probably don’t have a lot of experience dealing with insurance companies making it difficult to estimate the value of your car accident claim.

An experienced lawyer can help by providing an accurate estimate based on their deep expertise and knowledge of various insurance companies.

In addition, a lawyer can help negotiate with the insurance company to get you the maximum compensation possible for your claim. Contact a qualified car accident lawyer today to learn more about how they can help you get the compensation you deserve.