How do insurance companies decide how much they'll pay to compensate someone for an injury?

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Answer:

How do insurance companies decide how much they'll pay to compensate someone for an injury?

While the final payment figure depends on negotiations with the injured person, insurance companies and lawyers do use a formula to calculate a range of compensation for an injury. In general, if you've been injured you can expect to be reimbursed for:

medical care
lost income
temporary and permanent pain and other physical discomfort and disability, and
loss of family, social, and educational experiences.

In calculating the range of compensation, a claims adjuster begins with a standard damages formula. For details, read Nolo's article How Do Insurers Value an Injury Claim?