The Adjuster's Evaluation
Insurance adjusters use a combination of tools to evaluate settlement offers: documented economic damages (medical bills, lost wages), a multiplier or per-diem calculation for non-economic damages, liability assessment (what percentage of fault they attribute to their insured), and comparable settlement data from similar cases.
Economic Damages Calculation
Economic damages are the starting point — these are documented amounts from medical bills, lost wages, and other out-of-pocket costs. The adjuster reviews the medical records and bills and may challenge individual line items they consider unnecessary or unrelated to the accident.
Non-Economic Damages
Adjusters often use software (like Colossus) that applies a multiplier to economic damages based on injury type and severity to calculate pain and suffering. Plaintiffs and their attorneys argue for higher multipliers based on the specific impact of the injuries. This is where negotiation is most active.
Reserve and Authority
Adjusters set a "reserve" — an internal estimate of what the case is worth. They have settlement authority up to a certain amount. For higher amounts, supervisor or management approval is required. Understanding this dynamic helps explain why negotiations sometimes stall and then proceed in jumps.
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