After you have been in a car accident, all you want is to file and resolve the claim so you can get on with recovering from your injuries and get back to life as usual. When the insurance company comes back with an offer that seems low, you can feel frustrated. You might wonder how car insurance companies calculate insurance claim settlement amounts. There are several factors that determine how much you may be offered in a settlement and each are unique to your circumstances. If you believe that an insurance company is trying to pay you less than you deserve for your claim, an experienced car accident attorney with Friedman & Bresaw, PLLC may be able to review your case and offer guidance or assist you in negotiating with the insurance company. Call (603) 707-4800 for a case review consultation.
New Hampshire Automobile Insurance Laws
New Hampshire is the only state that does not require drivers to have automobile insurance in order to drive. However, this does not mean that drivers are welcome to do as they wish. Instead, drivers are personally liable for damages if they are at-fault in an accident if they do not carry auto insurance. Additionally, if they choose not carry auto insurance, drivers must be able to demonstate they can meet the state’s Motor Vehicle Financial Responsibility requirements, which include having $25,000 per person for bodily injury in an accident, $50,000 for bodily injury to two or more people in the same accident, and $25,000 for property damage, for a total of $100,000 per vehicle. Failure to carry auto insurance or meet the financial responsibility requirements can result in a suspended license.
The Motor Vehicle Financial Responsibility requirements are the same as the minimum limits for liability insurance in New Hampshire. In addition to liability coverage, NH RSA 264:16 requires the purchase of Medical Payments Coverage. NH RSA 264:15 requires drivers to purchase Uninsured Motorists Coverage if they purchase liability coverage.
Factors Considered When Calculating an Insurance Claim Settlement
An insurance claim settlement is calculated based on the unique circumstances of that particular claim. This is why it can be difficult to find out what the “average” settlement amount is. There is no average because each case is different. However, the factors that are considered are generally the same across all accidents.
Proof of Liability
New Hampshire liability in car accident cases follows the modified comparative fault rule. NH RSA 507:7-D provides that even if a driver is partially at fault for the accident, they may still recover their damages so long as their portion of fault is not more than the other parties. In other words, if a driver is less than 50% at fault, they can still file a claim and receive an insurance claim settlement.
However, whether the other driver was completely or only partially at fault, the individual filing the claim must be able to prove liability. This may be done using police reports, photos and videos of the accident scene, verbal or written admissions of liability, and other evidence. The amount of liability assigned to each driver will significantly influence how much a settlement will be.
Accident Severity
The severity of the accident is a significant factor in determining an insurance claim settlement. When an accident is more severe, it results in more property damage and injuries. The property damage costs more to repair or replace, and the injuries will require more treatments and medications. Both of these contribute to much higher out-of-pocket expenses, which increase the amount of the settlement.
Even a minor accident can result in major property damage or serious injuries, however. Therefore, while accident severity does contribute to determining the settlement amount, it does not always guarantee that more severe accidents will receive higher settlements than less severe ones.
Supporting Evidence
Supporting evidence to back up the claim may be crucial to the settlement amount. This evidence will include evidence from the accident proving liability and also include medical records and receipts proving injuries and the costs associated with the accident. Individuals may wish to consult with an attorney to discuss what evidence they may want to collect and how to present it to the insurance company.
Insurance Coverage
An insurance company will only pay an insurance claim settlement to the maximum of the policy limits. In some cases, this may mean that the at-fault driver does not have enough coverage to pay for all the injuries or all the property damage, even if they have the minimum coverage required by state law. When this happens, car accident victims will not be able to negotiate a higher settlement, as the insurance company is not legally required to pay more than the policy limits.
However, when this happens, the insurance company may want the victim to sign a release stating that in exchange for a settlement of the policy maximums, they will not file a lawsuit against the driver to recover additional damages. This is not a legal requirement, and accident victims may wish to consult with an attorney before signing such a release to ensure that they are not giving up money or rights that they are legally entitled to. Additionally, an attorney may be able to assist in communicating with the insurance company to decline signing the release while still getting the settlement.
Economic and Non-Economic Damages
Economic damages are the quantifiable damages that can be proven with medical records, receipts, pay stubs, and other evidence. These damages include property damages, lost wages, and medical expenses. Non-economic damages include those damages that cannot be backed up with evidence and are not as easily calculated, such as pain and suffering, loss of consortium, and punitive damages.
Both types of damages will vary based on the accident’s severity, the number of victims involved, and other factors. With the exception of proving liability, this may be the most significant factor in calculating an insurance claim settlement, as there must be damages for there to be a claim. This means that saving the evidence of economic damage, such as medical records, payment receipts, pay stubs, and repair estimates is essential.
Likelihood of Litigation
Litigation is expensive, with court costs and attorney fees. Insurance companies will consider how likely it is that the car accident victim will file a lawsuit if the claim cannot be settled. When they believe the victim will take the case to court, they are more likely to offer larger settlements in an attempt to avoid the higher costs of litigation.
While it is not required that car accident victims hire an attorney, insurance companies are more likely to believe that the victim would file a lawsuit if they have legal representation and guidance. If you would like the guidance of an attorney or wish to explore the possibility of a lawsuit because your insurance claim settlement is not going well, an experienced personal injury attorney with Friedman & Bresaw, PLLC may be able to provide the assistance you seek.
Tactics the Insurance Company May Use to Minimize the Settlement Amount
Insurance companies are in business to make a profit. Therefore, they will actively seek out ways to minimize the insurance claim settlement amount whenever possible. From attempting to put liability on the car accident victim to downplaying the cost of repairs to their vehicle, car insurance companies will look for every loophole they may allow them to pay less than the victim might otherwise be entitled to.
Shifting Liability
One of the most common tactics the insurance company may try to use is by shifting liability onto the accident victim. If they can prove that the victim is even partially responsible for the accident, it reduces the liability on their insured driver and thus, reduces the settlement they must pay. If they can prove the victim is entirely responsible, the insurance company does not have to pay at all. Therefore, they may try very hard to prove that the victim is partially or completely responsible for the accident occurring.
Disputing Vehicle Repair Costs
Another common tactic to minimize settlement amounts is to dispute the costs of vehicle repairs. This can take multiple forms. The insurance company may dispute the cost of the parts, insisting that aftermarket parts would be less expensive. They may dispute that the damage exists at all, or if they acknowledge its existence, they may claim the damage is not from the accident with their driver. They may also try to dispute the method in which the damage is repaired. For example, they may try to claim that a structural repair that is integral to the safety of the vehicle is merely cosmetic damage and thus, does not require taking the vehicle apart to repair.
One way accident victims can fight this tactic is by getting multiple estimates that itemize the different damages. When multiple repair shops all indicate the same damage, it will be more difficult for the insurance company to deny it.
Disputing Medical Treatments
Like disputing vehicle repairs, insurance companies may also dispute medical treatments. Again, this may mean disputing the expense of those treatments, the necessity of those treatments, or that the treatments are for injuries resulting from the accident with their driver. They may also dispute the number of treatments, such as when a victim needs months or perhaps even years of physical therapy. They may question why a less expensive or less effective treatment option cannot be used.
Victims can be prepared for this tactic by keeping their medical records for every appointment, treatment, or exam related to the accident. They can also ask their medical providers to provide detailed notes in those records explaining why specific treatments are required and why others are not considered or used.
Requesting Recorded Statements
Many people are used to calling customer service and hearing a statement that says something similar to, “This call is being monitored or recorded.” While they may not think anything of this when they are calling to complain about a dirty hotel room or being overcharged for a meal, a recorded statement in an insurance claim can do more harm than good. Insurance companies will ask questions and make statements in ways that are intended to get the victim to answer in a specific way. They are hoping that the victim will say something that can be used later to indicate the victim was at fault for the accident.
For this reason, it is not recommended that car accident victims agree to having any interviews, discussions, or phone calls recorded. While victims may need to communicate with the insurance company, if the communication is not recorded, the insurance company will not be able to prove that the victim said something that could hurt the victim’s case later. If the insurance company insists that a communication must be recorded, victims may wish to seek legal counsel and possibly be represented by an attorney who can offer guidance about what to say and what not to say.
Offering Quick, Low Settlements
After a car accident, the bills can begin piling up quickly. From vehicle repairs to medical expenses, added to the usual bills of daily life, things get expensive. If the individual is unable to work, this can create a very uncomfortable, anxious situation that makes them eager to get the money they are entitled to so they can start getting those bills caught up. Insurance companies bank on this and will offer a quick settlement that is much lower than the individual may be entitled to in hopes that the individual will take the settlement and go away.
While it may be tempting to take a lower offer because it comes so quickly, it is important that accident victims recognize that part of the insurance claim settlement process is agreeing that once they have accepted the settlement, the claim is closed. They will not be able to receive more money later, and they may not be able to file a lawsuit against the other driver. Therefore, whenever a victim is offered a settlement amount, they should consider consulting with an attorney to determine whether it is a fair settlement and they should accept it or if they should decline and continue to negotiate the claim.
Surveilling the Victim
Another way insurance companies can minimize, or even eliminate, a settlement is to call the victim’s credibility into question. One way they do this is by surveilling the victim. If they can get photos or videos that appear to show that the victim’s injuries are not as severe as they claim, this gives the insurance company leverage to try to reduce the claim. This is why it is critical that victims always follow any instructions provided by their medical provider, no matter how capable or healed they may be feeling.
How You Can Maximize Your Insurance Claim Settlement
While the insurance company may employ tactics to try to minimize the insurance claim settlement, accident victims can take steps to try to maximize their settlement. While there are no certainties in how much the claim will ultimately settle for, there are things the victim can do to arm themselves with information so they do not settle for a reduced settlement.
Conduct Your Own Investigation
While accident victims may not be experts in accident reconstruction, they can still conduct their own investigation and gather evidence. Police reports, photos, videos, witness statements, and other evidence can help put together a picture of what happened. Writing down their own recollection of the events that took place can also be helpful, so that if the insurance company states that something happened that did not happen or vice versa, the individual can refer to their own notes and dispute the statement.
Calculate Your Own Damages
Insurance companies will use formulas to add up the different expenses and determine a final figure to offer as the insurance claim settlement. Many victims simply assume the math is always correct and the figures being offered are fair. However, even if the calculations are done by computer algorithms, those algorithms use numbers and other information that is input by humans, who make mistakes.
Victims should take the time to do the math and calculate their own damages. While they may not be able to calculate the non-economic damages, they can calculate their own medical expenses, vehicle repairs, and lost wages. This allows the victim to doublecheck the insurance company’s numbers and confirm their accuracy. Victims can also choose to work with an attorney to do these calculations.
Negotiate Aggressively
Car accident victims should not be afraid to speak up and tell the insurance company if they do not think the settlement offer is fair. A settlement with the insurance company or a lawsuit are the only two remedies the victim has to recover their damages, so they should negotiate aggressively to get the money they deserve. If the victim does not feel they can handle negotiating as aggressively as may be necessary, they may want to consider hiring an attorney to assist them.
Consider Hiring Legal Counsel
Hiring an attorney is not required to file a car accident claim or a lawsuit against the other driver. However, an attorney may be able to advise the victim on the settlement offers they receive and communicate with the insurance company on the victim’s behalf. While there are no promises that this will increase the amount of any settlement offers received, an attorney’s experience and knowledge of the insurance industry, car accidents, and of the victim’s specific case may provide insights that help the victim feel they are making a more informed decision.
Do You Have to Pay Taxes On Your Insurance Claim Settlement?
In general, an insurance claim settlement is not subject to state or federal taxes. This is because as personal injury claims, much of the settlement money is meant to pay for the expenses associated with the accident, and thus, are not considered income. However, if the individual receives interest on their settlement, or is provided with damages for emotional distress or punitive damages, this money is considered taxable as income by the state of New Hampshire, the Internal Revenue Service (IRS), or both. Individuals who receive a settlement for a car accident or other personal injury may wish to consult with a tax advisor to confirm whether or not they must pay any taxes on the money to ensure they are handling it legally and to avoid penalties.
Remember the Statute of Limitations
Settling an insurance claim settlement can take a long time. Sometimes, insurance companies will deliberately slow the process down in hopes that the individual will give up on the claim and go away. The individual has a right to be compensated for their injuries and property damage and should not give up, however.
Individuals should remember that per NH RSA 508:4, they only have three years from the accident date to file a lawsuit. After the statute of limitations has passed, they will be barred from filing their claim. Therefore, if settling the claim does not seem to be working and individuals are considering filing a lawsuit, they may wish to explore that option as soon as possible to avoid running out of time.
How a New Hampshire Car Accident Attorney Can Assist You
Insurance companies deal with claims every day. They have experience with finding ways to offer less money or try to avoid paying the claim at all. Most car accident victims do not have this experience themselves and may feel at a disadvantage when faced with insurance company staff who attempt to make the claim seem smaller and less important than it is. A New Hampshire car accident attorney may be able to find expert witnesses to reconstruct the accident, find additional evidence, take witness statements, communicate with the insurance company, negotiate with the insurance company, and if settlement talks fail, represent you in court. At Friedman & Bresaw, PLLC, we stand ready to review your case and learn more about how we may be able to assist you. Call (603) 707-4800 for an appointment to explore your legal options.
