Claim Worth: Special Damages
Special damages are also called specific damages. These are your specific, out-of-pocket losses such as medical expenses and lost wages. The easiest way to think about these types of damages is that they are any figure you can prove a specific exact amount either through bills or expert opinion. Special damages are usually your medical bills (past, present and future) and your lost wages (past, present, and future).
Special Damages = Medical Expenses + Lost Wages
That being said, some people (read “adjusters) only consider Medical Expenses as your special damages. TIP: Ask the adjuster early on what he/she considers special damages – do they include lost wages? NOTE: When you hear about people multiplying special damages by a number (read about the formula), adjusters usually only multiplied your medical expenses by a multiple to get your pain and suffering. They would then take your medical expenses plus the multiplied pain and suffering and then tack on your lost wages to get you a final value. The old damages formula (before the advent of claims software) would look something like this:
Old School Value = (Medical Bills + (Medical Bills x 1.5 to 3) + Lost Wages
As you have already read before, this method has not been used in decades, since the insurance companies started using software to adjust personal injury claims.
Your medical treatment and expenses are going to be the center of your claim. The treatment you receive, and its cost, is the best indicator the insurance company has to determine how bad you were hurt. It is usually reasonable, and widely accepted, that the total cost and extent of your medical treatment reflects how bad you were hurt and the corresponding pain and suffering.
You are entitled to the full face value of your medical bills, not just the amount your health insurance company paid. For example, you have an ER bill from the hospital for $1,325, but the hospital reduced its charges pursuant to a contract with your health insurer and only got paid $850. You get the full $1,325 as part of your claim – the fair and reasonable value of your treatment. You may have to pay back your health insurance company later (see Health Insurance Subrogation). If you do, it is in your best interest to demand the full face value of the bills because you can keep the “spread,” or the difference between the bill and what the health insurance company paid.
Examples of medical expenses (and for which you need to have the bills in your investigation file) include:
- ER at the Hospital
- ER Doctor (usually separate bill)
- ER Radiologist (usually separate bill)
- Primary Care Doctor
- Physical Therapy
- X-Rays (will be a facility charge and a radiologist charge)
- Prescription medicine
- Over the Counter medications
- Heating Pads
- Ice Packs
- Transportation to/from medical appointments
Necessity of Medical Expenses
Adjusters sometimes try to back out some of your medical expenses as not “medically necessary.” Basically, an adjuster who did not go to medical school is telling you they are backing out certain expenses because they do not think they were necessary. You must fight this absurd argument. Tell the adjuster the services were ordered by qualified medical personnel and if they want to argue they were not necessary, they are going to have to pay an expert in litigation (i.e. if you don’t settle and file suit) to be able to say that to a judge or jury. The expense of paying the expert alone is normally more than the amount they are attempting to exclude. Most of the time you will see this tactic come up with emergency rooms running up high diagnostic bills. Hospitals have an incentive to do this because diagnostic procedures are a high profit margin for their business. Nonetheless, the bill is what it is and the adjuster needs to know that he/she can’t take that position if the claim doesn’t settle unless he/she has an expert.
You also need to be aware of adjusters’ tendency to view some sorts of treatment as “bill building,” especially when treating with chiropractors or physical therapists. Bill building is a technique used by personal injury attorneys, that is why adjusters are constantly on the look out for it. Attorneys will conspire to draw out your treatment into more visits then you really need, knowing that your claims’ value is driven in large part by total medical expenses. By building up your medical expenses unnecessarily, personal injury attorneys attempt to increase your case’s value. As a general rule, adjusters don’t want to see you treating with a chiropractor or physical therapist for more than 4-6 weeks and don’t want to see expenses over $4,000 to $6,000 for this type of treatment. Adjusters think that if you are not healed in 4-6 weeks with these types of providers then you should be consulting with specialists, such as orthopedists or neurologists, instead of continuing to go to a chiropractor.
Discounting Medical Expenses
Insurance companies will discount medical expenses (i.e. not offer you $1 for $1 on your bills) for some types of treatment because they don’t think the types of provider are legitimate. For example, adjusters don’t normally think chiropractors, massage therapists, or acupuncturists are legitimate and will offer you something less than full value of these expenses. Another reason adjusters don’t give full value on these types of treatment is because they are so used to personal injury lawyers negotiating down chiropractor bills after settlement. It is well known that personal injury attorneys have referral relationships with chiropractors. Many times attorneys faced with a MIST (minor impact soft tissue) case will talk the chiropractor into reducing his/her bill to make the settlement numbers work. Adjusters know this goes on and automatically builds in this discount to their offer. You need to explain to the adjuster you are not an attorney and don’t have any negotiating leverage with the chiropractor or other provider (even though we will get you to try to negotiate down the outstanding bills later!).
Besides the fore mentioned practitioners, adjusters and insurance companies generally view hospitals, medical doctors, and physical therapists as legitimate and won’t try to discount documented expenses.
If you have the choice of getting rehabilitative treatment from a physical therapist or a chiropractor, the physical therapy expenses will usually stand up better to an adjuster’s scrunity.
Future Medical Expenses
If you are not completely healed by the time you make a Demand and your doctor is saying you will need future treatment or procedures, you need to have your doctor write a letter setting out what the cost of those treatments/procedures would be over the rest of your lifetime. The adjuster will then discount this future amount to a present value for your damages claim.
You are also entitled to the money you lost by not working after your accident. These are called lost wages and are a component of your special damages. They are a hard number that is capable of being exactly calculated, unlike pain and suffering. Like everything in your claim, you must document your lost wages. Lost wages will appear as a separate line item in your Demand.
If you resort to using some sort of formula to assign a value to your claim (see Trying to Use Some Sort of Formula), lost wages should not be included in the base number that you multiply. The formula method uses medical expenses as a base multiple for figuring out pain and suffering, so it is not appropriate to add your lost wages to the base number. Instead, you will multiply your medical expenses by a multiple and then tack on your lost wages at the end.