If you want to settle your personal injury claim, you need to know the full value of the claim. This is the starting to point to calculating how much a case is worth.
Here, I’ll tell you what insurance companies don’t want you to know about the full value of injury claims.
Some insurance companies refer to the full value as the pure exposure value. I’ve also head a claims adjuster call the full value the “face value“.
What is the full value of claim?
It is the most probable full jury value of alleged injury (accepting all that is alleged as true).
The full value does not consider consider insurance coverage, liability, comparative negligence, credibility of parties, or other factors. (As I say throughout my blog, many factors can affect a claim’s value.) The full value is based on a reasonable jury’s award.
How do I know that at least one insurance company uses the term “pure exposure value”?
Search hard enough and you will find. The Hartford Insurance Company asks their attorney’s to state the claim’s pure exposure value. (The Hartford does this in its Attorney Report.)
Here is a screenshot from the Hartford Attorney Report:
If the Hartford asks their attorney’s to calculate a claim’s full value, it likely asks its adjusters to do the same.
Side note: The Hartford has a much better reputation for making fair offers than many other insurers.
Why you need to know the full value of a claim
Prospective clients, current clients and other attorneys often ask me how much their case is worth.
In order to know the full value of a case, you need to know the full value of pain and suffering for each claimed injury. You also need to know the total medical bills and lost wages. Medical bills, lost wages, pain and suffering are called damages.
Once you know the full value of the damages, you can then apply any factors that discount the value of your case.
1. Example of How to Calculate the Full Settlement Value
An example can help you understand the term “Full Value” as it relates to a personal injury case.
Let’s assume that you are driving a car in Florida. You aren’t paying attention. Thus, you crash into the back of the car in front of you.
We’ll assume that you’re claiming that the car accident caused your herniated disc. You’re 40 years old. Assume your out-of-pocket medical bills are $5,000.
In Florida, the “full value” of pain and suffering for a herniated disc that I use as a starting point for settlement purposes is $25,000 to $50,000. I know this range because I exclusively practice personal injury and have done so for about 10 years. I wrote an article that gives you average starting points for settlement values of pain and suffering in Florida injury cases and cruise ship cases.
There are no guarantees as to what will happen should a case go to trial. However, insurance companies run their business based on probabilities. Thus, they use settlement ranges to resolve cases.
Here are some abbreviations that I use when calculating the full value of an injury case.
“P & S” is Pain and Suffering.
“OOP” is Past and Future Medical Bills.
Now we look at the formula to determine the full value.
Full Value of Damages = (Medical Bills + Lost Wages + “P & S”)
Let’s look at the “full value” of this case:
“P & S” is the abbreviation for Pain and Suffering.
“OOP” is the abbreviation for Medical Bills You Owe.
Full Value of Damages = (Medical Bills + Lost Wages + “P & S”)
= ($5,000 + 0 + $25,000)
In this example you are at completely at fault, but the “full value” of your personal injury case is still $30,000.
This is true even if the liability claims adjuster may deny or minimize the existence, cause or severity of your herniated disc.
How is the “full value” still $30,000 if the other driver did nothing wrong?
It is because the “full value” of a personal injury case doesn’t consider factors that reduce case value.
2. “Full value” is different from the Estimated “Settlement Value” of a case.
Now, your case could have a high “full value” but it still may still not be worth a penny. This is true in Example #1 above. This is because estimating the “full value” is the first step when calculating the settlement value in a personal injury case.
Now let’s use the formula below to take a look at how the “full value” of an injury case affects the settlement value. I will use the same abbreviations from Example 1 above. The formula to determine settlement value is:
Settlement Value = (Medical Bills + Lost Wages + “P & S”) x (% Chance of Defense Verdict) (100% – Your % of Comparative Fault)
Let’s plug the figures from Example #1 into this settlement formula:
Settlement Value = ($5,000 + 0 + $25,000) x (100% – 100%)
= ($30,000) x (0)
So, in example #1, even though the “full value” of your case is $30,000 your case is worthless because you were 100% at fault.
3. Why Settlement Value Doesn’t Always Equals Full Value.
Claimant refers to someone who is injured in an accident. Sometimes an injured person will compare their settlement offer to someone else’s settlement. If the injured person gets a smaller offer, he or she may think that his or her attorney is doing a bad job.
For example, let’s say that Mike is offered offered $10,000 for his claim. Assume that he had shoulder surgery as a result of an accident.
On the other hand, Bill has shoulder surgery from a car accident. Bill gets a $130,000 settlement.
Although the full value of their cases may both be $130,000 (or more), the settlement value is different. This is because Mike’s claim may have had factors that greatly reduced the his case value.
Let’s take Example 1 But We’ll Change Liability
Now let’s take example #1 but change a few things. Let’s assume that the front of the other driver’s car hit the back of your car and the other driver admits fault. You are 18 years old.
The property damage to your car was huge. Your out-of-pocket medical bills are $5,000. The “full value” of your damages is also 30,000, just as in example #1.
This is because “full value” doesn’t take into account things that help or hurt your case. But in example #2, the settlement value is $30,000. Let’s see why:
Settlement Value = (Medical Bills + Lost Wages + “P & S”) x (100% – Your % of Comparative Fault)
Let’s plug the figures from Example #2 into this settlement formula:
Settlement Value = ($5,000 + 0 + $25,000) x (100% – 0%)
= ($30,000) x (100%)
Settlement Value = $30,000
Hopefully, you now understand the term “full value”. Now, you’ll have a better shot at understanding case value. As a result, the other articles on this blog will make more sense.
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Editor’s Note: This post was originally published in March 2013 and has been completely revamped and updated.