Does the offer (or settlement) include…?

We get this question a lot.

People want to know whether the offer includes all of their damages. 


But before answering that questions, let me take a step back.

Damages are one “variable” in personal injury cases.

[There are both economic and non-economic damages. Economic damages include things like medical expenses and wage loss. Non-economic damages include things like pain and reduced quality of life.]

But there are other variables too. Here are some of them:

• Fault

• Comparative Fault

• Insurance Coverage

• Ability to Pay

• Optics

• Venue

All of these affect case value. Negotiations synthesize damages and all of these other factors.

The offers and counteroffers exchanged during negotiations are affected by each side’s perception of damages. But an offer made by the insurance company is not the sum of the damages the injured person has suffered.

Instead, the offer made by the insurance company represents what the insurance company is willing to pay to buy a release of the injured person’s claims.

When a settlement is reached, the damages are not itemized. It may feel like there’s agreement regarding the damages suffered. And there might be agreement on some items like medical expenses or lost wages.

But what the settlement agreement really represents is a dollar amount the insurance company is willing to pay and the injured person is willing to accept for a release of all claims (for damages).

So in some ways all damages are included (because they can’t be sought in a separate claim or action). But none of them are specifically called out in the settlement agreement. And the damages we itemized in the demand letter are just one of many factors that influenced what the insurance company would pay and what we recommended the injured person accept.