How do Insurance Companies Value Automobile Personal Injury Claims

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As Chicago’s Top Personal Injury law firm we are often asked how insurance companies determine how much to pay to settle a personal injury claim.  Many companies use a computer software program known as Colossus. The program takes all of the feel and experience of the insurance adjuster and replaces it with a mechanical process that fails to consider the intangibles or non-legal issues  which are often the most important part of setting values. These would include whether injured party is attractive or ugly, smart or dumb, likeable or unlikeable and so on. Often jurors decide cases for reasons other than the law. The insurance industry maintains that the software is a useful tool because it considers a great many factors, and the settlement values are just a range for use in any way the insurer wishes. Plaintiffs' attorneys, including Steinberg Burtker & Grossman, Ltd. on the other hand, maintain that the software is a device that permits the insurance companies to discharge its adjusters and save labor costs. It is a penny wise dollar foolish concept that the insurance company has adhered to without much success.

A computer cannot quantify your emotional distress, or the loss of enjoyment of life because you no longer can take long walks with your spouse, or the pain and despair you suffer each day because your work hurts you and interferes with your healing? Unless all of your circumstances are included, is it fair to quantify all you have suffered and reduce to a dollar value based upon some factors that may or may not reflect your condition?

That is the pathetic Colossus software. It is an attempt by some insurance companies to value injury claims with no consideration at all given to whether or not a jury might award you more than the "average" claimant. They plug in such things as damage to the vehicles and expected length of treatment and allowable cost of treatment and many other variables and then come up with a number for the value of the personal injury claim. No consideration is given to the extent of your actual pain and suffering.

No consideration whatsoever is given to the fact that you might have a job where your injuries cause continued pain, or which slows your healing (consider, for example bank guard, or a person who has to stand all shift). They do not know, nor do they care, that you cannot hold your child because of the pain in your neck and back. There is no room in the formula for such information.

But the problem is that in our system, it is the jury that is supposed to be the basis for determining the value of a claim, and juries do tend to listen to and consider many of the factors that Colossus ignores. Juries do make a distinction based upon whether or not they think the plaintiff is believable, or has attributes we value in our society, such as the virtues of honesty, perseverance, humility, or patience, for example.

Colossus has no way to evaluate those positive traits, so if you are possessed of anything positive that is likely to bring you a larger jury verdict, it will not be included in the Colossus valuation. You will have become a magnetic image, no different in regard to your positive characteristics than the magnetic image of any other of thousands of claimants with injuries similar to yours.

The real problem with Colossus is that the adjuster for your insurance claim is just about stuck with the results that come out of the computer. Of course the insurance company will deny this, and will tell the media that Colossus is nothing more than an evaluation tool. It just gives a starting point, they say, from which the adjuster can move up if the facts of the case merit it. This absolutely false.

The Colossus result is a position that is increasingly locked in, and the adjuster who wishes to vary from it because of the facts of an unusual case, had better be ready to justify it. Furthermore, how many times do you think any adjuster trying to make the cut at an insurance company is going to go to her boss and ask for permission to exceed the Colossus determination of value? Considering that her evaluation and merit pay will be based upon how "efficiently" (read that to mean cheaply, or "hard-line") she settles her cases, do you think she will ever go to her boss to ask for more money than allowed by Colossus? Not very likely. In fact the qualifications of an insurance adjuster has dropped from a skilled to unskilled position. Chicago Injury Attorneys no longer even bother talking to them to settle claims.

Colossus is a well-kept secret by the insurance companies that use it, and they will likely not tell you if they have licensed the software. It is the market leader bodily injury claims-handling software used by an increasing number of insurance companies in the world. According to Computer Sciences Corporation, the company which produces Colossus, it is used by more than 50 per cent of the nation's claim adjusters and by more than 300 insurance companies.

Colossus is regularly beaten by skilled Chicago trial lawyers.

Rick Grossman