Insurance companies look at your medical bills, lost wages, and injury severity to decide how much money to offer you. They use special computer programs and math formulas to put a dollar amount on your pain and suffering. The process is not always fair because insurance companies want to pay as little as possible.
When you file a personal injury claim, you’re starting a complex process that determines how much money you’ll receive. This article breaks down exactly how insurance adjusters evaluate claims, what tactics they use, and how you can protect yourself.
What Happens When You File a Personal Injury Claim
The moment you file a claim, the insurance company assigns an adjuster to your case. This person’s job is to investigate what happened and decide how much your claim is worth. But here’s the thing—adjusters work for the insurance company, not for you.
Adjusters typically have years of experience, access to sophisticated software, and backing from legal teams. Their main goal? Settle your claim for the least amount possible while still seeming fair.
The First Steps Adjusters Take
Right after assignment, adjusters begin gathering information about your accident. They’ll collect police reports, talk to witnesses, and review medical records. They might even dig into your past to find previous injuries or claims that could reduce what they owe you.
Insurance companies may run background checks on injured people to find potentially damaging information. They’ll also look at your social media accounts. That photo of you smiling at a family gathering? An adjuster might use it to argue your injuries aren’t that serious.
The Basic Formula Insurance Companies Use
Insurance adjusters don’t just guess at numbers. They follow a formula that breaks down your claim into specific parts.
Economic Damages: The Easy Math
First, adjusters add up costs that have clear dollar amounts:
- Medical bills (doctor visits, hospital stays, medications, therapy)
- Lost wages from missing work
- Property damage (like your wrecked car)
- Future medical expenses if you need ongoing care
This part is straightforward. If you spent $5,000 on medical treatment and lost $2,000 in wages, that’s $7,000 in economic damages.
Non-Economic Damages: Where It Gets Tricky
The hard part comes when putting a price on pain and suffering. Insurance companies use two main methods:
The Multiplier Method
To estimate non-economic damages, insurance companies often use a multiplier method ranging from 1.5 to 5. Here’s how it works:
Total economic damages × multiplier = non-economic damages
If your medical bills and lost wages total $10,000, and the adjuster uses a multiplier of 3, your pain and suffering equals $30,000. Add these together, and your total claim value is $40,000.
The multiplier depends on injury severity. A broken finger might get 1.5, while a traumatic brain injury could get 4 or 5.
The Per Diem Method
With the per diem approach, adjusters assign a daily value to your suffering and apply it for your recovery duration. They might use $150 to $200 per day, or your daily salary if it’s higher.
Let’s say an adjuster picks $150 per day and assumes you’ll recover in two years. That’s $150 × 365 × 2 = $109,500 for pain and suffering.
The Secret Software That Decides Your Settlement
Most people don’t know this, but insurance companies use computer programs to calculate claim values. The most common one is called Colossus.
What Is Colossus?
Colossus uses over 10,000 rules to generate questions about your injury. Adjusters enter information from your medical records, and the program spits out a settlement range.
The software assigns “severity points” to different injuries. There are over 600 injury codes in Colossus. More severe injuries get more points, which translate to higher dollar amounts.
How Insurance Companies Manipulate the System
Here’s where things get unfair. Adjusters can set Colossus to intentionally underpay claims, typically by 12-20%. If an insurance company needs to save money, they can simply turn down the software’s payout range across all claims.
The program also considers things like:
- Whether you have a lawyer (and if that lawyer takes cases to trial)
- Gaps in your medical treatment
- Whether you continued working despite your injuries
- Your location and local jury verdicts
Major insurance companies that use Colossus include Allstate, State Farm, GEICO, and many others.
What Adjusters Look for in Medical Records
Your medical records are the most important piece of evidence in your claim. Medical records are a primary tool for insurance companies to assess injury severity. But adjusters aren’t just reading them—they’re looking for ways to pay you less.
Red Flags That Lower Your Settlement
Delays in Treatment
If you waited days or weeks to see a doctor after your accident, adjusters will question whether you were really hurt. Insurance companies may argue that delayed treatment casts doubt on injury severity or connection to the accident.
Gaps in Treatment
Missing appointments or taking breaks from therapy? Any delay or lapse in treatment decreases the value of claims. Insurance companies argue that if you were truly injured, you’d follow your doctor’s orders exactly.
Pre-Existing Conditions
Adjusters run background checks to see if you were involved in prior accidents to determine if injuries are pre-existing or aggravated. They’ll try to blame your current pain on old injuries, even if the connection is weak.
What Strengthens Your Claim
On the flip side, certain things make your claim more valuable:
- Immediate medical attention after the accident
- Consistent treatment with no gaps
- Following all doctor recommendations
- Detailed doctor’s notes explaining how injuries connect to the accident
- Objective evidence like X-rays, MRIs, and CT scans
- Physical therapy and rehabilitation records
- Specialist referrals showing injury complexity
Common Tactics Insurance Companies Use to Lower Your Payout
Insurance adjusters have a playbook of strategies to minimize what they pay you. Understanding these tactics helps you avoid falling into their traps.
The Quick Lowball Offer
Insurance carriers often seek to resolve claims for “nuisance” value from $1,000 to $3,000 early on. This happens before you know the full extent of your injuries. They’re betting you’ll take fast cash rather than fight for what you deserve.
The first offer is always the lowest. Never accept it without talking to a lawyer.
The Recorded Statement Trap
An adjuster might call you shortly after your accident, acting friendly and concerned. They’ll ask for a recorded statement “just for their files.” Don’t do it.
Recorded statements are always used to catch you off guard and minimize claim value. Adjusters ask tricky questions designed to make you say something that hurts your case later.
Politely decline and say you’ll provide information through your attorney.
The Medical Authorization Trick
Providing broad access to medical records may significantly damage claims if complete medical history reaches insurance companies. They’ll ask you to sign forms giving them access to your entire medical history—not just records related to your accident.
Why? They’re hunting for pre-existing conditions they can blame for your current injuries. Only provide medical records directly related to your accident, and have a Denver personal injury lawyer review any authorization forms first.
The Delay Game
Insurance companies know that financial pressure builds over time. Medical bills pile up. You can’t work. Rent is due. They deliberately slow down the process, hoping you’ll get desperate and accept whatever they offer.
The first offer made by insurance companies is always their lowest, and they have additional funds in their range to pay. If you counter with a higher demand, they often come back with more money.
Shifting Blame to You
Even if you’re clearly not at fault, adjusters will look for any way to pin some blame on you. In Colorado, if you’re found partially at fault, your compensation gets reduced by your percentage of responsibility.
An adjuster might ask, “Were you looking at your phone?” or “Did you see the other car before impact?” These aren’t innocent questions—they’re fishing for admissions they can use against you.
What Actually Affects Your Settlement Amount
Beyond the formulas and software, several real-world factors influence how much you’ll receive.
Injury Severity
Based on data from over 5,861 cases settled between 2021 and 2024, the average personal injury settlement is approximately $55,056. But this number means little for your specific case.
Severe injuries like spinal cord damage or catastrophic injuries result in much higher settlements—often hundreds of thousands or even millions of dollars. Minor soft tissue injuries might settle for $10,000 to $30,000.
Available Insurance Coverage
If software determines you’re entitled to $20,000 but policy limits are $15,000, adjusters will reduce the offer. Insurance companies won’t pay more than the policy limit, no matter how badly you’re hurt.
This is why it’s important to identify all possible sources of coverage, including:
- The at-fault party’s liability insurance
- Your own underinsured/uninsured motorist coverage
- Umbrella policies
- Business insurance (if applicable)
Clear Liability
When fault is obvious—like a car accident where someone ran a red light—insurance companies settle faster and for more money. When fault is clear and undisputed, insurance companies are more likely to offer fair settlements promptly.
But if liability is disputed, expect a fight. Insurance companies will argue over every detail to reduce their responsibility.
Quality of Documentation
Your case is only as strong as your evidence. Take photos of injuries and accident scenes. Keep every medical bill and receipt. Get witness contact information. Document how injuries affect your daily life.
Strong documentation leaves no room for insurance companies to question your claim.
Whether You Have an Attorney
Studies show 91% of personal injury victims who work with an attorney receive a payout, and having an attorney increases recovery by more than 60%.
Insurance companies know that lawyers understand their tactics and won’t be pushed around. Colossus even considers your attorney’s history and willingness to go to trial when calculating settlement ranges.
If adjusters think you’ll accept a low offer without a fight, that’s exactly what they’ll give you.
How Long Does the Evaluation Process Take?
Simple claims with minor injuries and clear liability might settle in a few months. Complex cases involving serious injuries, disputed fault, or multiple parties can take a year or longer.
About 95% of personal injury lawsuits end in pre-trial settlement. Most people never go to court. But the possibility of a lawsuit gives you negotiating power.
The process typically follows this timeline:
- Initial Investigation (1-3 months): Adjuster gathers evidence while you receive medical treatment
- Demand Letter (after treatment ends): Your lawyer sends a detailed demand explaining your injuries and requested compensation
- Negotiation (1-6 months): Back-and-forth offers until you reach an agreement
- Settlement or Lawsuit: Either settle or file a lawsuit if negotiations fail
- Payment (2-6 weeks): After agreement, insurance companies typically pay within a month
Understanding Settlement Statistics by Injury Type
Recent data shows settlement ranges vary widely by injury:
| Injury Type | Average Settlement Range |
| Minor soft tissue injuries | $10,000 – $30,000 |
| Broken bones | $20,000 – $50,000 |
| Back injuries | $20,000 – $50,000 |
| Car accidents | $15,000 – $50,000 |
| Motorcycle accidents | $30,000 – $100,000+ |
| Truck accidents | $50,000 – $500,000+ |
| Medical malpractice | $250,000+ |
| Catastrophic injuries | $100,000 – $5,000,000+ |
Average settlements for car accidents or slip-and-fall injuries typically fall between $15,000 and $30,000, though severe cases reach much higher amounts.
Remember: These are just averages. Your case is different. Don’t let insurance companies convince you that “similar cases settled for less.”
What to Do When You Receive a Settlement Offer
Getting that first offer can feel like a relief. But slow down. Here’s what to do:
Don’t Accept Immediately
Take time to consider whether the offer truly covers your losses. Calculate all your expenses—medical bills, lost wages, future treatment costs, and how injuries have affected your quality of life.
Understand What You’re Giving Up
Settlement agreements include a release that prevents you from seeking more money later. Once you sign, it’s over—even if you discover your injuries are worse than you thought.
Counter with Evidence
If the offer is too low, respond with specific reasons why. Point to medical records, lost income documentation, and how comparable cases settled. Show the insurance company you’ve done your homework.
Consider Getting Professional Help
Colorado personal injury lawyers work on contingency, meaning they only get paid if you win. The increase in settlement typically far exceeds their fee.
How Colorado Laws Affect Your Claim
Colorado has specific rules that impact personal injury claims:
Statute of Limitations
You generally have two years from the accident date to file a lawsuit for personal injury. Miss this deadline, and you lose your right to compensation forever.
For wrongful death claims, the family has two years from the date of death.
Comparative Negligence
Colorado follows a modified comparative negligence rule. If you’re found 50% or more at fault, you get nothing. If you’re less than 50% at fault, your compensation reduces by your percentage of blame.
For example, if your damages are $100,000 but you’re 20% at fault, you’ll receive $80,000.
Damage Caps
Colorado caps non-economic damages (pain and suffering) in some cases. For most personal injury claims, the cap is $642,180 (adjusted for inflation). The cap increases if you prove “clear and convincing evidence” of specific circumstances.
These caps don’t apply to economic damages like medical bills and lost wages.
Red Flags That Your Claim Is Being Undervalued
Watch for these warning signs:
- The offer comes within days of your accident (before you know full injury extent)
- Adjusters pressure you to settle quickly
- They downplay your injuries or say they’re not serious
- They claim “this is our final offer” early in negotiations
- They discourage you from hiring a lawyer
- They’re vague about policy limits
- They ignore certain injuries or treatments in their calculation
- The offer doesn’t cover your medical bills plus compensation for suffering
If you see any of these red flags, don’t sign anything. Talk to a lawyer first.
When to Hire a Personal Injury Attorney
Some people handle minor injury claims themselves. But you should strongly consider hiring a Denver personal injury attorney if:
- Your injuries are serious or permanent
- You missed significant work time
- Fault is disputed
- Multiple parties are involved
- The insurance company denied your claim
- You’re getting lowball offers
- The adjuster is giving you the runaround
- You’re not sure what your claim is worth
Lawyers level the playing field. They understand insurance tactics, know how to calculate true claim value, and aren’t afraid to file lawsuits when insurance companies won’t play fair.
Most Colorado injury lawyers offer free consultations. You have nothing to lose by getting a professional opinion on your case.
How Adjusters Evaluate Different Types of Accidents
Car Accidents
In automobile accidents, insurance companies look at property damage extent even though it has no direct correlation with injury. They know juries have trouble believing serious injuries came from accidents with minimal vehicle damage.
For car accident claims, adjusters focus heavily on:
- Police reports and traffic citations
- Photos of vehicle damage
- Witness statements
- Whether airbags deployed
- Speed estimates
- Seatbelt use
Slip and Fall Cases
Slip and fall claims are harder to win because you must prove the property owner knew (or should have known) about the dangerous condition.
Adjusters will investigate:
- How long the hazard existed
- Whether there were warning signs
- If the property owner had time to fix it
- Whether you were distracted or careless
- If you had a legitimate reason to be there
Truck Accidents
Truck accident cases often involve larger settlements because commercial insurance policies have higher limits. But they’re also more complex.
Insurance companies bring in accident reconstruction experts and defense attorneys early. They fight hard because the stakes are high.
Pedestrian and Bicycle Accidents
Pedestrian and bicycle accident claims typically result in severe injuries. Insurance companies can’t argue as easily that injuries aren’t serious when a car hit an unprotected person.
However, adjusters will still try to blame the pedestrian or cyclist for not being visible or following traffic rules.
The Role of Medical Treatment in Claim Valuation
Your medical treatment doesn’t just help you heal—it builds your case.
Types of Treatment That Increase Value
- Emergency room visits (show injury seriousness)
- Hospitalization (indicates severe trauma)
- Surgery (objective proof of significant injury)
- Physical therapy (documents recovery effort)
- Specialist treatment (shows complexity)
- Diagnostic imaging (provides concrete evidence)
Treatment Mistakes That Hurt Your Claim
- Refusing medical care at the accident scene
- Waiting too long for your first doctor visit
- Skipping appointments or not following recommendations
- Stopping treatment before your doctor says you’re healed
- Not telling doctors about all symptoms
- Going to providers insurance companies consider questionable
Insurance companies rely on ongoing medical care to validate claims. Consistent treatment proves your injuries are real and serious.
What Insurance Companies Won’t Tell You
Adjusters have no obligation to tell you the full truth about your claim. Here are secrets they keep:
Secret #1: Policy Limits
They might claim coverage is limited when actually higher limits are available. They won’t volunteer that multiple policies could apply to your claim.
Secret #2: Time Pressure Works in Your Favor
While they rush you, time pressure actually works against them too. As trial dates approach, insurance companies become more willing to settle rather than risk a jury verdict.
Secret #3: Their Software Is Flawed
Colossus and similar programs can’t account for your unique circumstances. Insurance companies don’t have some magic way of valuing claims that produces correct results. It’s just their starting point for negotiation.
Secret #4: They Track Your Lawyer
Insurance companies maintain databases on attorneys, noting which ones settle cheap and which ones go to trial. If you hire a lawyer known for fighting hard, your settlement offer often increases immediately.
Secret #5: Denied Claims Can Be Overturned
Many people give up after a denial. But denials can often be appealed successfully with the right evidence and legal arguments.
Protecting Your Claim from Day One
The actions you take right after an accident directly affect your settlement value.
At the Accident Scene
- Call 911 (creates official record)
- Take photos of everything
- Get contact info from witnesses
- Don’t admit fault or apologize
- Don’t discuss injuries in detail with anyone except medical staff
- Don’t sign anything from the other driver or their insurance
In the Following Days
- See a doctor immediately (even if you feel okay)
- Follow all treatment recommendations
- Keep a daily journal of pain and limitations
- Save all receipts and bills
- Don’t post on social media
- Don’t give recorded statements to any insurance company
- Report the claim to your own insurance
During the Claims Process
- Keep copies of everything
- Communicate through your lawyer when possible
- Continue treatment until your doctor says you’re done
- Be honest about injuries and limitations
- Don’t embellish, but don’t minimize either
- Document how injuries affect your daily activities
Final Thoughts
Insurance companies evaluate personal injury claims using a mix of formulas, computer software, and adjuster judgment. They start with your medical bills and lost wages, then use multipliers or per diem rates to calculate pain and suffering. But the process is far from objective.
Adjusters work for insurance companies, not for you. Their goal is paying as little as possible while appearing fair. They use tactics like lowball offers, delays, and blame-shifting to reduce claim values.
Understanding how insurance companies think and operate puts you in a stronger position. You’ll recognize their tactics and know when an offer is truly fair versus when they’re taking advantage.
About 95% of personal injury cases settle before trial, but having a lawyer who’s willing to go to court dramatically improves your settlement. Insurance companies respect lawyers who aren’t afraid to fight.
If you’ve been injured in Denver or anywhere in Colorado, don’t navigate the insurance company maze alone. The team at CO Trial Lawyers has over a decade of experience holding insurance companies accountable and maximizing compensation for injured clients. Contact us today at 303-390-0799 for a free consultation. We work on contingency, so you pay nothing unless we win your case.
Your injuries matter. Your claim has value. Don’t let insurance companies convince you otherwise.