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How Insurance Companies Evaluate the Value of a Claim

Ellis & Thomas, PLLC July 27, 2023

Most of us have had to file a claim through an insurance provider at some point in our lives. However, most of us aren’t aware of just how those claims are processed. The insurance trade is big business in the state, and each year, companies pay out billions of dollars in settlements.  

For example, in 2020, auto insurers in Texas paid out over $7 billion in losses, according to the Texas Department of Insurance. So, when you’re involved in an accident, you want to make sure you’re getting every penny you’re due, and one way to increase your chances is learning how the system works and how to maximize compensation.  

To consult with a personal injury attorney in the Houston, Texas, area, including Harris County, Fort Bend County, Montgomery County, and Brazoria County, call us at Ellis & Thomas, PLLC. 

Not All Claims Are Equal  

No two claims will be treated exactly the same because so much depends on the nature of your accident and the extent of your damages. However, there are two main considerations for insurance companies when evaluating any claim:  

  • All claims will be assessed based on your chances of winning at trial should your case result in a personal injury lawsuit. It’s almost always in the best interests of the insurance provider to avoid litigation, and they’ll try to negotiate a settlement with you that both saves them money and ensures they stay out of the courtroom. 

  • They will also consider how much a jury could potentially award you in damages and then use this estimate to gauge their own offer. 

For example, let’s say you were involved in an auto accident and are trying to claim the other driver was 100% responsible for causing the accident, but there are witness statements claiming you were texting on your cell phone at the time the crash occurred. A judge or jury would probably use this information to decide on a lower settlement since it’s likely your actions contributed to the accident.  

Alternatively, if you’re pursuing a medical malpractice claim against a healthcare provider but it becomes clear through the investigation that you failed to follow through with your provider’s treatment plan, they will most likely use this information against you to support a lower compensation.   

Factors That May Be Considered 

When taking into account the details of your case, there are several factors the insurer will consider that could increase or decrease your compensation.  

Factors that determine how much you’ll get for your accident: 

  • The length of time it will take to recover from your injuries 

  • The amount of evidence you’re able to present along with your claim 

  • How painful the injuries you sustained are 

  • The extent and invasiveness of the medical treatment you’ll need (for example, if you’ll need multiple surgeries in addition to physical therapy) 

  • The potential permanent effects of your injury, including partial disability or disfigurement  

Your Actions Factor In  

In addition to the evidence you provide with your claim, it’s important to understand that your actions can also affect your settlement. The first factor has to do with the state’s use of comparative fault. This is a legal model that allows for two parties to share liability in an accident and reduce the final payout based on your level of shared fault. For instance, if you’re found to be 30% responsible for causing an accident because you were on your phone at the time of the crash, your total damages will be reduced by 30%. 

Another factor that will be looked at is your failure to mitigate damages. For example, if you failed to seek out medical help in a timely manner or you failed to follow through with suggested medical treatment, these could factor in. Both of these actions could indicate your injuries aren’t as serious as you claim, and you therefore wouldn't get as large a settlement.  

Steps You Can Take to Maximize Compensation 

            1. Hire an attorney: One of the most important things you can do for yourself when pursuing an insurance claim or lawsuit is to work with a reputable attorney. Your lawyer can educate you on your options, help you gather and organize evidence, and negotiate on your behalf with insurance adjusters.  

            2. Seek medical attention: Even if you don’t feel your injuries were that serious, you should always seek medical attention. Symptoms can take days or weeks to show up after an accident, and only a trained medical provider can properly assess you.  

            3. Don’t take the first offer from the insurance company: Insurance adjusters will almost always lowball you with their first offer in hopes you’ll accept and they can close your case. You should never accept an offer without first reviewing it with your attorney.  

            4. Document everything and gather important information: Lastly, providing sufficient evidence is key to presenting a strong case. Keep every receipt, document, and report that’s related to your accident.  

Claims Can Be Complex. Get Our Support Today. 

If you’ve recently been involved in an accident and have questions like, “How much is my personal injury case worth?” or “How much can I recover after my accident?”, reach out to us at Ellis & Thomas, PLLC in Houston, Texas, to get answers.