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How do I calculate the value of my workers' compensation case for settlement?

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Although there is no set formula available to determine the settlement walue of your workers' compensation claim, there are several variables to consider when attempting to settle your claim.  First, it is important to know that it literally "takes two to tango," so even if you are interested in settling your claim, the employer/insurance company must also  be interested in resolving the claim or you will not be able to get a lump sum settlement.  This can be done through negotiation or mediation.  

If there is mutual interest, it then becomes important to determine if you will be entering a "global" settlement (settling both the wages and medical benefits of your claim), or only settling the wage loss portion (indemnity only settlement) of you claim.  Many insurance companies will only consider "Full Compromise and Releases" which means you will be completely settling your claim in exchange for a one time lump sum payment.  With this option, the insurance company will no longer be responsible for the payment of your work-related medical expenses or sending you weekly checks; in exchange, they will pay you a one time lump sum payment.

How you arrive at the value of your claim is determined on a case-by-case basis, but the following will provide a general overview of the factors that you should consider.

The one figure that will never increase over the life of your workers' compensation claim is your worker' compensation rate (provided it was calculated properly, of course) set forth in your Statement of Wages.  This is the amount of wage loss benefits that you receive on a weekly basis based on the average weekly wage you were earning at the time of your injury.  In 2016 the maximum workers' compensation rate is now $978.00 per week.  

Future medical benefits are perhaps the most unique aspect of every workers' compensation case.  Knowing what, if any, future treatment you need is a vital variable to consider when negotiating a settlement.  If you are going to need significant future medical care - and do not have an alternate source of insurance to pay for this treatment - if may not be in your best interest to even consider settling your claim.  You may also be able to negotiate an "open period" of medical benefits to pay for treatment for a period of time following your settlement.

Is there a scarring and disfigurement component to your claim?  If so, you may be entitled to an additional award.  Scarring and disfigurement awards are limited to "the head, neck, or face" and will be awarded at the discretion of the Workers' Compensation Judge for a period of up to 275 weeks of benefits. 

Other factors to consider are the likelihood of your returning to work, with or without a wage loss; the potential financial exposure your claim presents to the insurance company; and your personal desires to resolve the case and put the claim behind you.

All of the above should be discussed with your attorney as you consider the option of settling your case.  Not all cases can, or should, be settled at any given time, but you definitely want to maximize your settlement should you decide to resolve your case via Compromise and Release.  Making an informed decision is the best way for you to achieve this goal.

Frank Lafferty
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Frank focuses on Worker's Compensation and Injury cases
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