Factors That Can Limit Your Compensation

If you were seriously injured in an accident, you are probably wondering how much your injuries are worth. Regardless of whether you make a claim with an insurance company or file a personal injury lawsuit, the amount of money you ultimately receive for your injuries and other losses may be limited by a number of factors. This is true even if you were hurt very badly in your accident and experienced significant pain and suffering.

Calculating the value of your personal injury claims after an accident is far more complicated than adding up your medical bills and lost wages, then tacking on an arbitrary amount for pain and suffering. Factors affecting your insurance settlement or damages award include, but are not limited to:

  • Proof of liability;
  • The place where your accident occurred (also known as “venue”);
  • Whether any medical treatments you received were “reasonable and necessary”;
  • Whether your injuries are permanent;
  • Whether you will require medical treatment in the future;
  • Whether you have any scarring;
  • Whether you have lost time from work and/or will lose time in the future;
  • Your level of comparative fault; and
  • Insurance policy limits.

(Also Read: The 6 Steps to Take After an Accident)

If you are concerned about how your personal injury award may be reduced by any of the factors discussed below, you should consult with a personal injury lawyer in your area. These factors may or may not apply to your case. Only a licensed attorney can give you legal advice about your situation.

Questions of Liability

Before you can receive monetary compensation for your injuries and other losses, you must establish that another person or entity (such as a business or government agency) is legally responsible or (“liable”) for what happened to you. Typically, this requires proving that another person or entity was negligent. If you cannot convince an insurance adjuster that their insured was negligent, you will not be compensated for your injuries and other losses. Similarly, if you cannot prove that the person against whom you brought a personal injury lawsuit (the “defendant”) was negligent, you will not be awarded money damages by a court.

If you are pursuing an insurance claim, once you prove to the at-fault party’s insurance company that their insured’s negligence was the cause of your injuries, you have overcome the first hurdle in securing a favorable settlement. In court, you or your personal injury lawyer must prove that the defendant was negligent. To learn more about how liability is evaluated by insurance adjusters and courts, visit:







The location where the accident happened may also limit the amount of compensation you receive for your injuries and other lawsuits. In some cities and counties, verdicts for personal injury lawsuits are much higher than in others. Typically, out-of-court settlements will reflect the average jury awards in the area where your injury occurred.

If you hire a personal injury lawyer to represent you in a personal injury lawsuit, he or she will research jury verdicts in previous cases with fact patterns similar to your own. This will help your attorney get a better understanding of what your case is worth and the amount of money damages to request on your behalf.

Comparative Fault

Your compensation may be reduced if you were partially responsible (or “at fault”) for your injuries and other losses. This is generally the case if you live in a comparative fault state. In comparative fault states, liability for an accident can be shared by the at-fault party and the injured person. Insurance adjusters and courts will allocate a percentage of fault for an accident to each party. Then, the injured person’s compensation will be reduced by the percentage of fault assigned to him or her.

An example of how comparative fault works after a car accident is useful here.

Example: Patty was stopped at a stop sign when her car was struck from behind by David. She was injured in the collision, and made a settlement demand of $10,000 to David’s insurance company.

Typically, a driver who rear-ends a car at a stop sign would be 100 percent (100%) liable for the accident. But in this case, the insurance adjuster concluded from a police report about the accident that the brake lights on Patty’s car weren’t working properly. The insurance adjuster blames a portion of the collision on Patty. The insurance adjuster decides that Patty was 10 percent (10%) at fault for the accident, and that David was 90 percent (90%) at fault. Instead of offering Patty $10,000, she only offers her $9,000.

It is important to understand that you do not need to accept an insurance adjuster’s allocation of fault or a reduced settlement offer. If you believe that an insurance adjuster has unfairly assigned liability to you in making a settlement offer, you should speak to a personal injury lawyer about your options.

If you file a personal injury lawsuit, the jury may make a similar allocation of fault for your accident. In states that adhere to a rule known as modified comparative negligence, including Colorado, you may not recover damages for your injuries and other losses if the jury determines that you were 50 percent (50%) or more liable for the accident.

“Reasonable and Necessary” Medical Costs

When negotiating an insurance settlement with an insurance company, you must remember that claims adjusters will not pay for unnecessary medical costs. They will only agree to pay for “reasonable and necessarymedical costs for treating your injuries.

As an example, if you sustained soft-tissue injuries in a car accident that typically cost around $3,000 to treat but instead ran up chiropractic bills of $5,000, an insurance adjuster may only agree to pay you $3,000. In this scenario, you would be responsible for paying the $2,000 balance. This is one reason why it can be helpful to consult with a personal injury lawyer following an accident about how to proceed with your medical treatment. That an insurance company will not pay all of your bills does not mean that the bills are in fact not reasonable and necessary. It does mean that in order to recover those bills, filing a personal injury lawsuit may be necessary.

You should only receive medical treatment from reputable physicians and care facilities. Try to avoid doctors and clinics that claim to be “personal injury specialists.” It is possible for some providers to run up exorbitant medical bills, hoping to get paid as much as they can when your insurance claim settles or you win your personal injury lawsuit. Alternative medicine or procedures that are considered by the medical field to be experimental are usually red flags for insurance companies, and they often deny paying for such treatment.

Policy Limits

If you are seeking compensation through an insurance company, your settlement amount may be limited by the policy limits of the at-fault party. If your injuries and other losses surpass the at-fault party’s policy limits, the insurance company may offer you the full amount allowed by the policy. This is also known as “tendering policy limits.”

If you believe that you deserve more compensation than the at-fault’s insurance policy allows, your only option to obtain the remainder of your damages is to file a personal injury lawsuit against the at-fault party. Hopefully, the at-fault party will have some assets of value that can compensate you for your injuries and other losses.

You May Need a Personal Injury Lawyer

Negotiating a fair settlement with an insurance company after an accident can be difficult. If you are concerned that you may not be able to obtain a fair settlement for your injuries and other losses on your own, you should consult with a personal injury lawyer right away.

The information on this page contains general information about negotiating an insurance settlement and securing a personal injury verdict. It may not apply to you. Only a licensed attorney can give you legal advice about your situation.

Disclaimer: Information provided on this site is NOT formal legal advice. It is generic legal information. Under no circumstances should the information on this site be relied upon when deciding the proper course of a legal action. Always get a formal case evaluation from a licensed attorney if you think you might have a personal injury lawsuit.