How to Calculate an Insurance Settlement

You can present hand-written or computer-printed estimates.

Good documentation makes thousands of dollars of difference when you calculate an insurance settlement. Insurance exists to restore your condition to its pre-accident state. (Reference 1) Calculate your insurance settlement to include all the elements of your condition. Depending on local jurisdictions and which type of insurance covers your claim, these elements might include subjective items in addition to actual expenses. Obtain and keep receipts for all expenses. Get estimates for all future expenses that relate to this loss.

Things You'll Need

• Camera
• Estimates
• Receipts
• Bills

Instructions

1. 

   Insurance companies accept digital photos as evidence.

   Photograph all damage and injuries--at the scene of the accident, if possible. Photographs provide important proof that your damages exist and that the accident caused your injuries. In cases where subjective items enter the settlement calculation, photographs of injuries often determine the award for subjective damages.

2. 

   You can present hand-written or computer-printed receipts.

   Get estimates or receipts for all expenses. Typical expenses include: actual cash value of destroyed property, repair of damaged property, towing, rental car, motel room, temporary help, medical bills, prescriptions, loss of earnings and debris removal (see reference 2). Atypical but sometimes valid expenses include psychological distress and loss of consortium (loss of the company of your significant other). Psychological distress involves witnessing the gruesome death of a loved one.

3. 

   Property depreciates by 10 percent per year.

   Add up all your estimates and receipts. Realize that your car, house or other destroyed property will be depreciated by about 10 percent per year from the time it was new (actual cash value), unless replacement-cost insurance applies to this loss (see reference 1).

4. 

   X-rays provide excellent documentation of fractures.

   Add a subjective amount based on the severity of any injuries, if the insurance type and jurisdiction of this claim allow for it. In addition to photographs, journals of how these injuries affect quality of life can help support the subjective portion of the settlement. Very roughly: a death claims the limit of whatever insurance policy pays the claim, while a sore back only claims a few hundred dollars.

Tips & Warnings

• Use the camera on your phone, if you don't have a better camera with you.

• Photograph the whole person, car, house or business as well as the damage or injury.

• Show the face, license plate or address in at least one photo.

• Tend to all these chores with a sense of urgency, or the adjuster might deny some expenses as unrelated to this loss.

References

• Anderson Kill Loss Advisor: Actual Cash Value and Replacement Cost Value: How To Get the Most from Your Property Insurance
• All Insurance Info: Coverage D - Loss of Use Coverage

Resources

• NAIC: Consumer Information