What is the formula insurance companies use to compute Pain and Suffering payment resulting from an auto accident?

My wife and I were in a severe auto accident on 7-6-08. Our car was totalled and we both suffered concussions.We both had CTs (she had 2 CTs and 2 trips to the ER) I also had hand and dental injuries. Both cars with Geico, who has paid the bills. My wife =dizziness and memory loss on and off for almost a year. What should we expect has a “fair compensation” from Geico? Friends told us we should receive twice the amount of our medical bills. Is this correct? What formula do lawyers use to determine a fair settlement ? The Geico offer is 1/2 my wife’s bills and 1/3 my bills. Not enough!

Asked on July 6, 2009 under Insurance Law, Arizona


L.M., Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Unfortunately, there is no "formula" used by insurance companies to settle injury claims.  Yes, much of it is based on the amount of the medical bills--mainly because higher bills typically result from more serious injuries.  However, many other factors go into evaluating a claim.  Adjusters looks at the facts of the accident, who was at fault, the seriousness of the injuries, if the treatment was reasonable and necessary, what the individual's prognosis is for full recovery, whether he lost time at work, how much time, how much in wages was lost, what other expenses there were that were related to the accident (like did you have to hire a housekeeper, for example, because you could no longer do housework), any special factors involved--such as if your legs were hurt and your job requires standing and you can no longer stand for long periods of time, etc.  They also look at jury verdicts for similar injuries to make sure their evaluation is within a reasonable range.  Then they come up with their own range.  If you are negotiating on your own without the assistance of an attorney, do be careful.  If the other driver was 100% at fault, you should be getting at least twice the medical bills including the cost of those bills if all of the treatment was reasonable and necessary.  If they are only offering 1/3-1/2 the amount of your bills over and above paying the bills themselves, something is not right.  Either the liability is not clearly on the other driver, or they believe the treatment was not reasonable and necessary, or they are trying to take advantage of you.  I suggest you contact a personal injury attorney in your area for assistance.  You can try www.attorneypages.com or your local bar association for a referral.  Please note that the statute of limitations on personal injury cases is two years from the date of the accident.  You must either settle your case or file a lawsuit by that time.  Hope this was helpful to you.

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