Sometimes it happens during the initial phone call with a potential client. Other times it happens a month later, while the client is still seeking medical treatment for their injuries. And still other times, it happens as we move forward on a claim and are attempting settlement. Regardless of when it happens, I inevitably am asked time and time again: “What is my claim worth?”
While an experienced attorney can make an educated guess as to the value of a claim, it is just that: a guess. There is no formula; no hard and fast rule. There are numerous things to consider in determining the value of a claim.
Sometimes clients will phrase the question as “Isn’t my claim worth three times my medical bills?” This method of valuing a claim is an absolute myth. Consider the following scenario: two people are involved in a motor vehicle accident- one has a sore back and racks up $10,000 worth of massage bills, the other fractures a bone and requires a $10,000 surgery. In this situation, each of the injured parties has $10,000 in medical bills, but you can see why their claims clearly would not be valued identically.
Some of the things that are taken into consideration in valuing a claim include the type of accident, the severity of the accident, the amount of damage to the vehicles involved, type(s) of injuries sustained, pain level, duration and cost of medical treatment, type(s) of medical treatment, whether there are any pre-existing conditions, and the impact on daily activities and quality of life. It is clear that, in the scenario above, the second person has sustained a much more serious injury, his pain levels were likely higher and lasted longer, and the medical treatment he received was more reasonable/necessary. His claim, therefore, is simply worth more than the claim of the other person.
Another thing to consider is the value of a claim versus what a person can actually recover. While an injured person’s claim may be valued at higher, he will be unable to recover any more than the insured’s policy limits. In Washington State, a person is required to carry at least $25,000 in liability insurance. In the situation, for example, where a person has $40,000 in medical bills, but the at-fault driver’s policy limits are the state minimum of $25,000, it is extremely unlikely that the injured person can recover anything in excess of the $25,000 limits regardless of the actual value of his claim. The only other option a person has in this situation is to attempt to sue the driver personally, which is not likely to yield any actual recovery.