Calculating the medical costs for treatment of a given injury is not a difficult task. Yet determining a fair compensation requires more completing more than those simple calculations.
The formula used by insurers
A summation of all the claimant’s medical costs is one part of that formula. Still, that summation does not place a value on losses such as pain and suffering. That fact explains the need to enter a different figure in the insurer’s formula.
Insurers call that other figure a multiplier. The calculated sum has to be multiplied by a number that corresponds with the nature and extent of the claimant’s injuries. Hence, only minor injuries were reported, the value for the compensation would approximate the result of multiplying the summation of costs by a small number, such as 1.5.
In contrast to that, the approximate compensation for someone with severe injuries would be the summation of medical costs times 5. For someone with a catastrophic injury, it would be that summation times 6 or more.
Calculations that might be made on the figure obtained with the formula
The insurer’s formula assumes that only one party has been named at-fault. Suppose, though, that the insurance company had determined that the fault should be shared between the plaintiff and the defendant. What would happen then?
In that case, the figure obtained by using the formula would need to be reduced. If one of the party’s had contributed to just 20% of the factors that caused the accident, then that party’s compensation would be 80% of the number that had been obtained by using the insurer’s formula. The situation would be different for the party that had contributed to 80% of the factors. That second party would get just 20% of the amount of money that had been determined as the proper amount for compensation.
That is why there are 2 aspects to determination of the compensation for the victim of a personal injury. The first aspect concerns calculating the effect of the non-economic factors, among all those that determine how much money a given victim deserves.
The second aspect relates to the concept of shared fault. If the defendant and plaintiff have to share fault, then each of them has any calculated compensation reduced. The level of that reduction must correspond inversely to the level of the one party’s contribution to the injury-causing accident.
Personal Injury Lawyer in Windsor know that the insurance companies welcome the chance to show that a policyholder has the right to insist on shared fault. Hence, those same companies have learned how to reduce the compensation for a plaintiff that needs to share his or her fault. In other words, each of them has recognized the 2 aspects to determining compensation.