Valuing a bodily-injury demand

Handed a demand letter and asked what a bodily-injury claim is worth, the base model picks a number: "given the injuries, this is probably worth around $75,000." That is the plaintiff attorney's job done backwards — a feel, not a valuation. A defensible number is built: the documented dollars are pulled out and kept apart from the estimated dollars, the estimated part is produced by a stated method, and the whole thing is then adjusted down for what this event did not cause and for harm the claimant let grow. This skill does that build.

Every figure below is an estimate of civil damages, not legal advice, and follows ordinary US third-party liability claims practice. Jurisdictions vary; state the method and let the adjuster localize the numbers.

1. Split the demand into special and general damages — always, first

The two halves are valued completely differently, so never blend them.

• Special damages (economic, documented): the hard, receipted numbers — past and future

medical bills, and lost wages plus any loss of future earning capacity. These are proved with bills, records, and pay stubs. You do not invent them; you total the documentation.

• General damages (non-economic, estimated): pain and suffering, disability, disfigurement,

loss of enjoyment of life. Nobody billed for these, so they are estimated by method (below), never billed and never simply asserted.

A demand that lumps "$140,000 for everything" is not evaluable. Force the split first: what part is documented economic loss, and what part is the non-economic estimate riding on top?

2. Value the general damages by an explicit method — multiplier OR per-diem

Pick one and show the arithmetic. Do not state a pain-and-suffering figure with no derivation.

Multiplier method — the everyday approach:

General damages  =  multiplier  ×  medical special damages
Total value      =  special damages (medical + wage loss)  +  general damages

The multiplier scales with severity and permanence, typically 1.5 to 5:

• ~1.5–2: soft-tissue only (strains, sprains, whiplash), full recovery, short treatment.
• ~2–3: a fracture or a course of therapy, objective findings, near-full recovery.
• ~3–5: surgery, permanent impairment, disfigurement, or lasting disability.

Multiply the medical specials by the multiplier; add wage loss on top as a special — do not run the multiplier over lost wages. A soft-tissue claim with $30k of physical-therapy bills does not become worth $150k because the demand asserts it.

Per-diem method — for a finite, temporary injury with a clear recovery:

General damages  =  daily rate  ×  days from injury to maximum medical improvement

Use per-diem when the claimant heals to a defined endpoint (maximum medical improvement is the point where they are as recovered as they will get); it fits temporary suffering better than a multiplier and is easy to defend day by day. It fits permanent injuries poorly — a lifetime of days inflates absurdly — so a serious permanent injury belongs on the multiplier.

3. Carve out what this event did not cause — causation and pre-existing conditions

Only the harm this accident caused is compensable. Two carve-outs, and they point in opposite directions — keep them straight:

• Pre-existing / degenerative baseline is not paid. If the imaging shows age-related

degeneration or a prior injury the claimant already had, the portion of treatment and impairment attributable to that baseline comes out of the number. You pay for the crash, not for the claimant's arthritis.

• Aggravation of a pre-existing condition IS paid — but only the aggravation (the "eggshell

plaintiff" rule). You take the victim as you find them: if this event worsened a prior condition, the worsening — the delta above the baseline — is compensable even though a healthy person would have been hurt less. What is not compensable is the baseline they walked in with.

So a herniated disc in a claimant with documented prior degeneration is neither fully paid nor fully denied — value the aggravation the collision caused, above the pre-existing baseline.

4. Reduce for failure to mitigate

The claimant has a duty to keep the harm from growing. Reduce the value for damages they could reasonably have avoided: large gaps in treatment, non-compliance with prescribed care, or refusing a reasonable recommended procedure that would have limited the injury. You do not deny the whole claim — you decline the avoidable portion of the damages that the failure caused.

5. A time-limited within-limits demand is a bad-faith decision, not a routine offer

Watch for the specific, dangerous shape: a demand at or below the policy limit, with a firm deadline to accept. This is not evaluated on the claim's leisurely timeline — the deadline sets a bad-faith response window, and blowing it is the single most expensive mistake in claims.

The trap: an insurer owes its insured a duty of good faith. If liability is clear and the likely verdict is at or above the policy limit, and the claimant offers to settle within limits, then rejecting or ignoring that reasonable offer can strip away the policy-limit ceiling. The carrier then becomes exposed to the full excess verdict above the limit — the insurer, not just the policy, pays the overage.

So when you see a within-limits, time-limited demand:

• Treat the deadline as controlling. Evaluate before it expires; do not let it lapse

unanswered while gathering more information.

• If liability is reasonably clear and the exposure meets or exceeds limits, a within-limits

demand should generally be accepted (or the limits tendered). Sitting on it to save policy dollars risks a far larger excess and bad-faith exposure.

• If you cannot fully evaluate in time, respond inside the window — request a reasonable

extension, tender what is supported, or engage in good faith. Silence is the thing that creates the bad-faith claim.

Putting it together

1. Total the special damages from the documentation (medical + wage loss).
2. Estimate general damages by a stated method — multiplier on medical specials, or per-diem to

maximum medical improvement — and show the arithmetic.

1. Carve out the pre-existing/degenerative baseline; keep the compensable aggravation.
2. Reduce for any failure to mitigate.
3. Factor liability — if the claimant is partly at fault, the realistic value drops by roughly

that share; a contested-liability claim is worth less than a clear one.

1. If the demand is within limits and time-limited, stop and handle the bad-faith window

before the deadline — that decision outranks squeezing the number.

State the result as a range built from these parts, with the method shown — not a single confident figure pulled from the severity of the injuries.