All Info About Auto Repairs
Your One Stop Source For All The Information You Need For Your Vehicles.

Insurance Claim Personal Injury Settlement Part 1

Insurance Claim Personal Injury Settlement - The "Multiplier Method" (Part One)

  By Dan Baldyga
About Dan Baldyga
  Dan Baldyga has a lifetime of experience in the field of motor vehicle accidents, personal injury and compensation.
More about Dan  

The so-called Multiplier Method, is a technique used to place a value on "pain and suffering". This method is often implemented by insurance adjusters when involved in a routine and simple motor vehicle accident, personal injury claim. It's my intent to present this to the readers of The Insurance Corner in two installments. Consider this to be the first installment.

Okay, the time has arrived to settle your personal injury insurance claim. It was a routine accident that wasn't your fault. You were the recipient of a "soft tissue injury", identified by your attending physician as the typical whiplash. The injury prevented you from reporting to work for 7 days. You visited your doctor three times over a period of four weeks before he discharged you. These are the types of accident's that make up the vast majority of motor vehicle personal injury claims.

Your total medical bills came to $400.00. You can prove lost wages of $500.00 - - so, your total out-of-pocket comes to $900.00. In this relatively simple case The "Multiplier Method" can be implemented to determine the value of your pain and suffering. Why? Because those involved in the business of insurance claims know from experience that, in routine claims, the multiplier does a fairly good job of evaluating a personal injury. Here's how it works:

DETERMINING THE VALUE OF YOUR PERSONAL INJURY: Multiply that final figure of $900.00 by 3 ($900.00 X 3 = $2,700.00) and it comes to $2,700.00. Under normal conditions, involving nothing more serious than a soft tissue injury, your "pain and suffering" is worth approximately $2,700.00, plus the out-of-pocket bills that are a direct result of the accident which are, in this example $900.00. So, this particular case is worth ($2,700.00 + $900.00) approximately $3,600.00, in addition to whatever the cost, that's been agreed upon, to repair the damage to your motor vehicle.

YOUR INITIAL DEMAND: To discover where you should begin, in your negotiations, multiply that $3,600.00.00 by ($3,600.00 X 2 = $7,200.00). This tells you your initial settlement demand to the adjuster should be $7,200.00, plus your property damage.

THE NEGOTIATION PROCESS IN ACTION: Negotiating an insurance settlement is like attending a flea market and bargaining for something that attracts your attention at one of the booths. You and the buyer (the adjuster) each have an idea how much an item (your injury) is worth. In this particular instance you've concluded yours is worth approximately $3,600.00.

Just like at the flea market, neither of you really knows what limits the other is willing to go. And so, like it or not, you have no choice but to engage in a long, drawn out process of quibbling.

In this particular instance, you've determined your initial demand should be $7,200.00, plus your property damage. An initial demand like that will shock the adjuster. Once stated he's going to take a deep breath and say to himself, "This one ain't gonna be easy".

Until you've reached the very end, the first rule of bargaining is never lower your demand until the adjuster makes a counter-offer. If you lower your demand once or twice during a single negotiation contact (either in person or in a telephone conversation) without the adjuster making a counter-offer, you've revealed to him that your initial demand is weak.

A good rule-of-thumb to keep in mind is: If you lower your demand you should wait for the adjuster to make a counter-offer, before reducing your demand a second time.

Think of your negotiation process as similar to selling a car or any other property. You initially ask for more than you're willing to accept and the potential buyer offers less than they're willing to pay. After some negotiations, you settle on a price that makes you both feel as if they got a reasonably good deal.

BE PATIENT: A claim settled in haste is rarely paid its fair and full value. You must make up your mind that you have no choice but to proceed through the insurance claim haggling process. There's no other way!

After you've made your initial demand the adjuster may begin to bargain right then and there, or he may ask for some time to consider your demand and then get back to you, either in person or by telephone. One way or the other he'll say something like, "You've asked for $7,200.00 plus your property damage. Come on, you know that's not realistic. What can we really settle this case for, right now?"

Your response should be something like, "Ok, you tell me what it's worth. I'd really like to settle it." This answer is truthful. What you've said doesn't scare the adjuster away and you've not given up anything. You've left the door open for the counter-offer you want him to make.

When he states emphatically, something like, "The most I can offer you is $2,000.00, plus your property damage", this implies he's got more. Rest assured that an adjuster's offer, especially his first one, is negotiable. How can you be sure? There's only one way to find out. Your response should be, "is that figure your maximum authority?"

Now you're asking him to bid against himself. You're not committing yourself to a lower figure than your initial demand. What you're doing is obtaining valuable information.

Typically the adjuster will predictably say something like, "No, that's not my maximum authority. But you'll have to get into my ballpark if we're gonna settle this claim".

He's telling you he has more money but he wants you to come down before he offers it. You should, at this point, come down, about twenty percent. In this particular example (20% of $7,200.00 is $1,440.00). And so, that $1,440.00 (deducted from $7,200.00.00) would bring you down to $5,660.00. Armed with that figure you should proceed to try it on for size by telling him, "I still believe my case is worth more than what you're offering but I'm willing to come down a little". You might pause thoughtfully and then add, "I'd like to get it over with so I'll settle for $5,660.00".

No matter which way you slice the cake the adjuster is a professional and he knows your case is worth about $3,600.00. To get it over with, and in an effort to swindle you, he'll come back with an offer of $2,900.00. In the overall scheme of things that's not bad because you're getting close to the $3,600.00 you had determined the value of your claim to be.

At that point drop your demand another 20% (20% of $5,660.00 $1,132.00) to $4,528.00. In mock frustration you tell the adjuster you've just about had it. Stay cool and say, "Alright, I'll settle at $4,528.00 but that's it". The music continues and the dance goes on.

Be sure to catch Part Two of Insurance Claim Personal Injury Settlement - The "Multiplier Method" here next month.


DISCLAIMER: The only purpose of this claim tip is to help people understand the motor vehicle accident claim process. Neither Dan Baldyga or Vince Ciulla make any guarantee of any kind whatsoever; NOR do they purport to engage in rendering any professional or legal service; NOR to substitute for a lawyer, an insurance adjuster, or claims consultant, or the like. Where such professional help is desired it is the INDIVIDUAL'S RESPONSIBILITY to obtain said services.

Copyright (c) 2005 by Daniel G. Baldyga All Rights Reserved

Dan Baldyga's fourth and latest book Auto Accident Personal Injury Insuraece Claim: (How To Evaluate And Settle Your Loss) can be found on the Internet at This book reveals "How To" successfully handle your motor vehicle accident claim, so you won't be taken advantage of. It also goes into detail regarding the revolutionary BASE (The Baldyga Auto Accident Settlement Evaluation Formula). BASE explains how to determine the value of the "Pain and Suffering" you endured because of your personal injury.

Additional Information provided courtesy of and Warranty Direct
© 2000-2007 Vincent T. Ciulla

FREE Newsletter. Sign Up Now!

Help keep this site free.

Copyright (c)2006

Search All Info About

Related Articles