Car Insurance Claim Settlement Factors

As lay people we are not trained on how car insurance settlements claims are calculated - insurance adjusters are. But if you are ever faced with negotiating a car insurance claim settlement, you should be knowledgeable about the car insurance settlement factors used by insurance adjusters to calculate settlement offers, so that you will not be taken advantage of. Here are some guidelines that will help.

Auto insurance adjusters look at several factors when determining a car insurance settlement offer. They look at the facts about the accident (how did it happen), liability (who was at fault and to what extent), injuries and claimed expenses. Even though adjusters will tell you there is no formula to figure the value of pain and suffering, a general rule of thumb according to auto insurance adjusters I have known is three times the cost of any medical expenses incurred.

With respect to car insurance settlement for vehicle damage, generally auto insurance companies are obligated to restore your vehicle to the same condition it was in before the accident unless the damage is so severe that the vehicle is deemed a total loss because it is economically impractical to repair. In such cases insurance companies will pay the actual cash value (ACV) or "fair market value", what the vehicle could have been sold for immediately before the accident. In some instances an insurance adjuster will deem a vehicle a total loss when the appraised damages equal 80% of the ACV because frequently once repairs are begun, additional or "hidden" damages are discovered which would account for the remaining 20%. Insurance companies determine actual cash value by referring to the auto valuation publications like the Kelley Blue Book. This is where things can get dicey as it is a fact of life that cars are depreciating assets and in some circumstances your car insurance settlement for damages could actually be less than what is owed on your auto loan. Even if you happen to be "upside down" and owe more on your vehicle than its fair market value, the insurance company is under no obligation to pay more than that amount.

In summary, car insurance settlements are calculated by adjusters by looking at the car insurance settlement factors of damages suffered and the percentage of fault. These factors are then used to calculate the car insurance settlement for medical expenses, pain and suffering, and property damage.