Free Initial Consultation 24/7
Insurance companies evaluate your claim in a couple of different ways: the first is evaluating liability through police reports and recorded statements, the next is evaluating the potential claim value through the policy limits, then calculating the overall medical expenses you incurred, any out-of-pocket expenses, and determining the pain and suffering you endured during recovery. Finally, they evaluate the alteration to your daily life after the accident. All of this is done while the insurance company continuously runs a risk assessment of the overall case to determine how much they are willing to negotiate on your claim and how likely your case would win at a jury trial.
Now that we’re aware of what insurance companies use to determine the value of injury claims in Minnesota, let’s see how the evaluation contributes to the overall value of the claim and your potential settlement amount.
The first thing insurance companies will do once you are involved in a collision is investigate liability. Liability, for insurance companies, is about determining which, if any, insurance bears the monetary burden of paying the bodily injury claim.
When insurance companies investigate liability, they will gather any police reports, recorded statements, and photos from the scene to help determine who was at fault. The police report is the best evidence of who was involved in the incident and of any contributing factors. If the police report shows clear evidence that the other party was at fault, then the at-fault party’s insurance company will have a very difficult time attempting to disprove and devalue your claim. However, if the police report shows you were at fault for the collision, you will no longer be able to pursue a bodily injury claim, and you will only be able to establish a no-fault or PIP claim.
Once liability is determined, the policy limits for the case must be established. Policy limits are the amount of coverage you selected when you purchased auto insurance. They are referred to as policy limits because that is the most insurance will pay per the policy selection. In a bodily injury claim, you are operating under the at-fault party’s bodily injury policy limits, and in Minnesota, we have minimum bodily injury policy limits of $30,000 per person and $60,000 per accident. That means if the at-fault party is insured with minimum policy limits, your claim’s maximum value will be $30,000, but that does not automatically mean you will receive a $30,000 settlement. Alternatively, some individuals elect to purchase more bodily injury coverage, so their insurance may pay more to the injured party because the policy limits are higher. Policy Limits are vital and will largely affect how insurance companies handle your case. The higher the policy limits, the more the insurance companies will want to negotiate and devalue the claim. If you are involved in a collision and the at-fault party has high policy limits, it would be advised to contact a personal injury attorney so you can receive the most compensation possible from your claim.
After the insurance company reviews the policy limits, it will then compare the policy limits to the medical costs you have incurred up until this point. All medical expenses incurred will be combined and added to the case’s overall value. If you have incurred $4,000 in chiropractic care, $4,000 in physical therapy, and $2,000 in aftercare checkups due to the collision, your claim’s value would be $10,000. It’s vital to inform your legal team of all your treatment facilities so they can properly gather all your medical records and billing statements as proof to the insurance company that your treatments are directly related to the collision. Once all payments are added up, that total will be one part of your case’s overall value. If you have incurred medical costs beyond the policy limits, I’d advise contacting a personal injury attorney to assist you in filing an underinsured motorist claim.
Out-of-pocket expenses are also included in the claim’s overall evaluation. These expenses can include any medication you bought for the injuries you sustained in the collision and a variety of other expenses that you incurred, which should be reimbursed by the at-fault party’s insurance. If you are unsure which out-of-pocket expenses you can claim in a letter of demand, contact your personal injury attorney, and they will advise you on what can be included in your claim.
Once your medical expenses have been calculated, the next determining factor is the overall pain and suffering you endured during the injury and your recovery. The pain and suffering calculation is made using either the multiplier method or the per diem method. The multiplier method uses the total economic damages and multiplies them by 1.5–5, depending on the severity of the injuries. The per diem, or daily rate, method calculates a daily rate for pain and suffering and multiplies it by the number of days spent in pain, or the “days of suffering.” This daily pain rate is often calculated based on your daily earnings, but it can also be a set amount reflecting pain intensity. Although pain and suffering constitute general damages, we can often assign monetary value to that pain based on prior medical records and recommendations from treating physicians. It’s important to notify your attorney about the pain and suffering you have endured during your recovery, as your statements of pain and suffering and how it impacts your daily life will be used when writing the letter of demand. If your mental health has suffered as a result of a personal injury, please let your attorney know, and they will ensure to include mental health claims in your letter of demand.
Pain and suffering, and alteration to daily life, are calculated together as they often impact each other. Insurance companies will evaluate pain and suffering based on the alteration to your daily life, and vice versa. The more your pain and suffering have impacted your daily life, the more monetary value can be contributed to your pain and suffering claim. If you had debilitating headaches that turned into migraines every day for 3 months, that pain and suffering claim would be higher than that of an individual who has occasional headaches that happen once every two weeks. However, both statements are valuable to each claim, as they show the impact on your daily life beyond attending regular treatments. If your pain has impacted your work or ability to spend quality time with friends and family, it’s important to notify your attorney so they can add that alteration of daily life in your letter of demand.
A variety of factors can affect the overall evaluation of a case. Some of these additional factors include permanent disability, scarring, potential for future surgery, lost wages, etc. If you are seeking optimal recovery for your claim, it would be advisable to contact a personal injury attorney so they can assist you in receiving the maximum possible compensation for your claim.
Now that we have a better understanding of insurance evaluations, let’s see how this evaluation plays out. You were hit by an at-fault driver who has minimum policy limits of $30,000 per person. You had minimal soft tissue injuries and received a variety of treatments, which totaled to $10,000, you also had some pain and suffering that impacted your daily life, but it was temporary and has since been resolved. Using the multiplier rate with minimal alteration to daily life, we would multiply the medical cost incurred by 1.5 ($10,000 x 1.5), totaling $15,000 in pain and suffering. The cost of pain and suffering and the alteration to your daily life would be combined with the medical costs incurred, bringing your total claim to $25,000. However, insurance companies will try to undervalue your claim and offer you less money. In nearly every case, insurance adjusters will attempt to reduce the monetary value of the pain-and-suffering claim. If you have been offered a settlement for your claim and have not yet retained a personal injury attorney, it would be advisable to contact one so they can assist you in receiving the maximum compensation for your claim.
The value of your case is determined by several factors, including the policy limits you and the at-fault party have, the injuries you sustained during the collision, the treatments you received for these injuries, the pain and suffering you endured during recovery, and the overall alteration of daily life. Each of these elements plays an important role in the value of your case. Despite insurance companies evaluating your injury claim in Minnesota, they are not the best party to tell you the true value of your claim. Insurance companies make their money by lowballing you into accepting a smaller settlement amount than your claim is worth, and once you sign the settlement check, you will be forever barred from reopening the case. If you would like to receive the most value for your claim, it would be advised to contact a personal injury attorney, as insurance companies have been known to offer less settlement money to unrepresented individuals.
At BK Law Group, we work diligently to ensure you receive the most compensation possible for your claim. For a free consultation of your case, call BK Law Group, and our dedicated personal injury team would be more than happy to help.
Copyright ©2026 BK Law Group, LLC. All rights reserved.
