Value of My Injury Claim or Case

Evaluate the Value of My Claim – Personal Injury

How do I evaluate my claim?  What is the settlement value?  How is the value calculated?

Evaluating your personal injury claim involves several moving parts.   This article will isolate the different parts so you can make sense of your claim, and make sense of how the evaluating process is done. 

Typically you look at ability to pay (insurance), negligence (what the person did that caused the injury), damages (what harms and losses did the negligence cause), and liens (what is owed out of the settlement to others).  I discuss each item below: 

1) Insurance issues/Ability to Pay:
The first thing you need to do when evaluating the value of your claim is to verify if the person who caused the injury has the ability to pay the claim or not.  In car accident cases, the law requires people to have insurance.  In most automobile accident cases insurance is available to cover the damage caused.
a)    Liability Insurance:  In most injury cases, you will want to verify that there is liability insurance somewhere that will pay any claim that may be owed.  In automobile cases, this is usually done early on.  When a police officer comes to the scene, they will collect the insurance information from everyone involved and ensure that all parties receive that information. 
       In premises cases (such as slip and falls, dog bites, work place injury, etc.), verifying insurance can be problematic.  If you have been attacked by a dog, animal control typically verifies who the owner of the dog is, but they do not collect insurance information.  The same for premises cases – even if the local authorities come out to investigate a premises case – usually insurance information is not collected.  Often this can cause problems later, for example, if the person who caused the injury is a renter of an apartment or rental home, there may not be insurance that will cover the claim, and the individual may not have the money to pay for the harm he or she caused.  You need to find out early on to prepare yourself with what you face financially. 

 Even if there is insurance, there are certain types of wrongdoing that are not covered.

 “Intentional acts” are typically not covered by liability insurance.  So if someone intentionally causes the harm, then their liability insurance will not cover the damage they do. (Shootings, some road rage incidents, etc.).   

“Business related activities on a personal policy” are usually not covered.  For example, if someone has a personal auto liability policy on their personal car, but is driving a dump truck for a construction company when he causes the accident, their personal auto liability insurance will typically not cover that claim.  Typically in this situation the business that owns the dump truck has insurance that will cover the wrongdoing (so no need for the personal insurance).  Problems arise when someone is working in a small business that does not have insurance (like as a small courier service that requires their drivers to drive their own cars for delivery), and the courier has not told their insurance company that they use their vehicle for business purposes.  Here, you may find that there is no insurance, and because the company is small - there might not be any assets to collect either. 

Types of insurance that may cover an injury claim are: 
    1.  Auto liability:  Auto accidents are covered by automobile insurance.  The Texas Department of Insurance has an Auto page (here).  The Department defines certain terms that you will find on auto insurance policies (here). 

    2.  Homeowners liability:   The Texas Department of Insurance Homeowners section describes coverages for homeowners insurance.  The first thing to do is get an actual copy of the insurance policy if possible – different policies may cover different claims.  Typically, most homeowners policies will cover your liability for injury to people or property that an insured person causes.  Examples:  (Form A), (Form B). 

    3.  Renters liability:  In the case of a person renting a home, apartment, or other location, renters insurance may cover liability.   The Texas Department of Insurance describes what renters insurance covers (here). 

    4.  Commercial General Liability (CGL) Policy:  (CGL example) – This is a business insurance covering liability in a person’s business. 

    5.  Garage liability:  Covers towing or service stations for damage they may do.
 
    6.  Umbrella:  (Defined) – This type coverage can fill in the gaps for a person’s liability insurance.  It not only goes in excess of what their primary coverage covers, but in cases where there may be some gaps where the primary insurance ends up  not covering, then the umbrella coverage becomes primary. 

     7.  Uninsured/Underinsured Motorist Coverage:  In automobile cases, Uninsured Motorist coverage is used when the other driver has no insurance, and UNDERinsured motorist coverage is used when the other driver’s insurance is not enough to cover all of the losses that were caused.
b)   Amount of Coverage v. Severity of Injury:  Liability insurance may not be enough to cover the injury.  For example, in Texas, most drivers only have $30,000.00 in liability insurance coverage for an injury they may cause.  If a person is injured seriously, and requires multiple days in the hospital, this amount of insurance often will not cover the entire claim.   In these cases, other insurance – as listed above – need to be considered. 

Defendant's inability to pay damages: 
Regardless of the amount of a person’s damages – if you cannot collect, there is no real value to the claim.  If your damages are $10,000,000.00, but you cannot collect a penny because the person who caused the injury is bankrupt and uninsured – and there is no other insurance or way to cover the injury, then the “value” of the claim is zero – as it cannot be collected.  As you can see, the ability to actually collect for the damage caused will impact the evaluation of the claim’s value. 

Once you have determined that there is a way to collect (insurance or enough assets to cover the claim) then you can move on to determine negligence, damages and collection/lien issues.  

2)  Negligence:  In Texas, negligence is generally defined by a reasonably prudent person theory - and also if the injury was foreseeable.  This is not the “legal jargon” definition, but we look to see if the person who caused the harm acted in a way we would expect a normal reasonably cautious person in their situation to act.   We don’t expect people to run red lights, run stop signs, to speed, to change lanes without making sure the way is clear, to drive without paying proper attention to the roadway ahead of them, etc.   People have a “duty” to others in the world to act in ways that will not cause unreasonable risk of harm.   If that duty is breached, and that breach causes injury, and that injury was foreseeable – then the person who causes the injury owes for the harms and losses he causes. 

Foreseeability can probably in some ways be described by the "butterfly effect".  The butterfly effect is used to describe how the flapping of a butterfly's wings on one side of the world can "cause" a hurricane on the other side of the world.  The hurricane is not foreseeable in this situation, but it theoretically is possible.  Sure we know it theoretically "can" happen, but its not something you would normally expect to happen from the flapping of the wing of the butterfly.   In negligence cases, the theory is similar.  Some distant wrongful act that is too far removed will often be deemed by a court to be too distant from the harm, so that it is not "foreseeable", and therefor there is no legal responsibility. 

The case used in law school to introduce law students to the foreseeability concept is the Palsgraf case.  This is where some railroad employees negligently tried push and pull a passenger onto a train that had started up.  The passenger lost his package he was holding (a package of fireworks) - unknown to the railroad employees.  The fireworks hit the rail, exploded, and knocked down some scales on the other end of the platform that injured Palsgraf.  The court held that there was no way for the railroad to have foreseen that the passenger had explosives in his package that would have caused such harm. 

Value of the negligence:  To see what value is added to a claim due to negligence, you must think about how a “Jury” would view the claim if they were asked to put a value on it.  The reason for this is because if you cannot get the insurance company to agree to a value, then the next step is to file a lawsuit and ask a jury what their value for your claim is.  There is a trick here though, the jury (in Texas) does not get to know about your negotiations with the insurance company.  In fact, you cannot bring up insurance at all.  The claim, in court, is to determine if the other person was at fault, and if so, how much were you damaged.  Whether there is insurance or not has nothing to do with fault, and has nothing to do with the amount of damage done to you (according to Texas courts anyway).  So you can’t talk about how mean that adjuster was, or how nobody would return your calls from the insurance company – and that is why you are filing the lawsuit.  As far as Texas courts are concerned, that is irrelevant (even if it is the most relevant reason why you are filing a suit). 

    a) Duty & Breach:  To evaluate the VALUE that the duty and breach add to the claim, you must look at what kind of breach it was.  For example – say a person who caused the breach was paying full attention, but let their foot slip off the brake, and that caused the injury.  If that person is apologetic, admits fault, and is up front with his insurance information – typically this adds NO value to the claim.   A jury does not get angry with a person who is honest and who takes actions to be responsible for what damage he caused .  .  . typically anyway.

    b)  Kind of Breach:  If the person who caused the injury was intoxicated, on drugs, was racing his car, was doing something else at the time that society would deem “unacceptable”, then regardless of their honesty about their shortcomings, a jury will typically still be upset about the behavior that caused the injury.  This typically will add value to your claim.  The amount it adds depends on the degree of the behavior. 

    c)  Dishonesty:  Honesty is a true wildcard in valuing a claim.  Both YOUR honesty, and the other person’s honesty.  If you are seen as being dishonest about something regarding your claim, a jury may “pour you out” – meaning give you “zero” as damages, even if you were really hurt, and the other guy really was at fault.  Why?  Because your dishonesty will cause the jury to dislike you, and find reason to not believe your claims. 

    On the other hand, if you are honest, but you can catch the other person in a lie about his responsibility in the claim – this can add tremendously to the amount a jury will award.  You must be able to prove the other person is lying though.  It cannot be a case of “he said/she said” – where the jury has to take your word about who is telling the truth.  But if you have a video, or a witness, or some other way to prove the other person is consciously being dishonest (not just mistaken), then a jury will often “punish” that person in their verdict, often giving awards that exceed what you might expect. 

3)  Damages:  
    a)  Causation & Damages:  You have to prove your damages were “caused” by the occurrence.  In other words, if you already had a hurt neck, or hurt back, and you had recently seen a doctor for your injury – then a jury might not believe a claim that your neck or back was injured in this occurrence was actually caused by the occurrence.  They might think you are trying to claim a preexisting problem.  If a jury thinks you are doing this, they will punish you and give you nothing.  Don’t claim more than what is true.  Only claim what is actually caused by the occurrence.   Often, insurance companies can find your prior injury history from other insurance companies or even prior doctors you treated with.  If they see a similar injury in your history – and it looks like they can claim this prior injury is the same as your current injury you are claiming, they will make that argument to not pay you.  

    If you had a preexisting condition, but it was no longer in need of treatment, and then the accident caused the injury to flare back up and caused you to seek additional treatment – then say it that way – this way there can be no confusion later on about whether you were being honest or not in making your claim.    The insurance company still owes the claim in this situation, they just don’t owe for causing the original injury itself – but they do owe for aggravating it or causing additional harm to that preexisting injury - and whatever treatment is needed for that aggravation/additional harm. 

    b)  Types of Damages:  If you go to the doctor one time, and never go back, the value of your injury will be much different than a person who requires months or years of treatment for their injury.  The damage caused is different.  Take a look at the following links to see the types of damages that you may be able to claim: 

    Damages recoverable in personal injury cases often can include the following:

Past and future medical bills, past and future lost earning capacity, past and future lost income, past and future physical impairment, past and future disfigurement, past and future mental anguish, past and future pain and suffering, property damage, loss of use of your property - such as rental car bills, storage, total loss of property, diminished value of property, loss of body member (arm, leg, . . .), loss of body capacity (hearing, eyesight, . . . ), loss of consortium (spouse, parental, child/filial), loss of services, emotional/mental trauma (bystander injury), prenatal injury, exemplary damages, prejudgment interest, attorney's fees, and court costs.

4)  Collection & Lien Issues:  
    Often, liability insurance policies are required to pay back other sources (other than the injury person) out of the injured person’s claim.  The following are a list of some of the sources that may require payment out of your claim – this reduces the amount you get in your pocket out of the claim.
 
    a)  Health Insurance Subrogation:        If your health insurance paid any of the medical bills from the claim, they may be able to collect (subrogate) for that amount out of your claim.  WATCH OUT:  Typically what auto insurance companies do is get you to agree to a certain amount to settle your claim (say $10,000), then they get you to sign a release – saying they will send you the check once they get the release.  THEN – once they have the release – they call you and tell you “Sorry sir, just noticed your health insurance paid some of this”, “We are legally obligated to pay them back, so we are sending them $5000 of the $10,000 we agreed to settle, and sending it to them to satisfy their subrogation claim.”  They then send you a check for $5000.  This can cause BIG problems if you did not know about the lien.  You may have made the settlement based on using that $10,000 to pay for bills out of your own pocket (copays, deductibles, lost income, other out of pocket expenses from the loss that were not covered by any insurance).  If this is the case, you will be infuriated – if you had only known about the health insurance subrogation, you would have added it to the amount to collect in settlement.  This is a claims adjuster’s trap.  He knew what he was doing – played dumb and let you put the noose around your own neck – acting as if he didn’t know anything until “after” you signed a release. 

    Always assume you will need to pay back a health insurer – it might not be the case every time, but assume you will.  Get the information needed to pay them back (the amounts they actually paid), and collect for those amounts as well – you will be required to pay it out of your settlement funds most of the time.  Don’t get caught short in the claims adjuster’s trap. 

    b)  Medicare & Medicaid Subrogation:       Medicare, Medicaid, and other government programs have automatic “super liens” on cases.  You WILL always have to deal with these entities prior to settling your claim.   They must be paid back, or you must have a written agreement from them agreeing that they will accept a certain amount out of your settlement, prior to your settling your claim. 

    c)  Workers Compensation Subrogation:     Workers Compensation always has a lien in Texas – there are some exceptions.  Most personal injury attorneys can find the exceptions to see if you qualify for any. 

    d)  Hospital Liens:     Hospitals will often file a lien against your settlement funds, so don’t expect to “stiff” the hospital when you settle your claim.  You must deal with the hospital, get an agreement from them before you settle your claim, as to what amount they will accept as full payment for their claim.  Always assume a hospital emergency room that you visited due to your injury has a lien.   They can file a lien at almost any time prior to you cashing your settlement check.   All too often, a person will negotiate a settlement with the auto liability insurer, be waiting for the check, and then the adjuster calls and says, “The hospital you visited tells me they have a lien.  We are forced by law to take some of your settlement proceeds to pay for that lien.”  You then ask, “When did they file the lien?”  The adjuster says, “ they filed it when I called them to ask them if they had a lien, they said they were going to file one right now, since I hadn’t issued your check yet.” 

    So, always assume there is a hospital lien and prepare to pay the hospital bill out of any settlement.  If there isn’t one yet, there will be one when the adjuster calls the hospital to ask them if they have a lien.

Summary:  Find out if there is an ability to pay for the injury caused; if so, then look at what type of wrongful act was committed (how egregious was it, would it make a person who didn't know anyone involved in the case mad that they did such a horrible thing, or is it the type of negligence that is often termed as "just an accident"); next, evaluate the harms, losses, damages that were caused by the act to calculate what amount of money needs to be paid in order to make the injured person whole (think objectively - as if you are looking at someone else's injury.  Someone else's broken leg can sometimes be a funny story, but MY broken leg is never funny . . . ; finally, see who is required to be paid back in the form of liens (Medicare, Health Insurance, Hospital liens, etc.) - as this money will often be taken from your settlement to satisfy the liens - whether you want it to be taken out or not. 

Finally, if the road becomes too complicated, the injury too severe, or the amounts too large to feel comfortable doing it yourself, contact a Dallas personal injury lawyer to help with your case.  The Law Office of Doug Goyen has vast experience over the years handing personal injury cases.  Call us at (972) 599 4100. 

By Doug Goyen, douggoyen@gmail.com

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