How Are Permanent Impairments Calculated

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Determining the financial value of permanent impairments is one of the most complex aspects of personal injury claims. It’s far more involved than simply adding up medical expenses. Insurance companies often try to minimize these claims, and that’s where having an attorney on your side becomes critical. They will frequently undervalue the long-term ramifications of injuries, focusing solely on the immediate, quantifiable costs.

One common approach used is the “whole person” impairment rating. This system, typically based on the American Medical Association (AMA) Guides to the Permanent Impairment, assigns a percentage value to each injury, reflecting the degree to which it affects an individual’s overall physical, mental, and emotional function. While this seems straightforward, it’s important to understand that the AMA Guides are notoriously subjective and open to interpretation. Adjusters use this subjectivity to reduce payouts.

I’ve spent over 13+ years practicing personal injury law here in San Diego. Having been trained by former insurance defense attorneys, I’ve seen firsthand how they evaluate, devalue, and deny claims. They are trained to find any possible reason to lessen your recovery.

How is a “Whole Person” Impairment Rating Determined?

The “whole person” impairment, as the name suggests, assesses the cumulative impact of all injuries to the entire body. It’s expressed as a percentage. For example, a 10% whole person impairment means the individual is considered to have a permanent functional loss equivalent to the loss of 10% of a normal, healthy person. The goal is to quantify the lasting effects of an injury on someone’s daily life.

This assessment requires a thorough review of medical records, diagnostic testing (MRIs, CT scans, nerve conduction studies), and often, an independent medical examination (IME). Adjusters may request an IME, but be cautious. Under CCP § 2032.220, while you are generally required to submit to one physical examination, understand that the doctor hired by the insurance company has a vested interest in minimizing your impairments.

Importantly, the whole person impairment rating is just one factor in calculating damages. It doesn’t directly translate to a dollar amount. It’s used in conjunction with other factors, such as lost wages, future medical expenses, and pain and suffering, to determine the overall value of the claim.

What Types of Damages are Included in a Permanent Impairment Claim?

Beyond the whole person impairment, several other types of damages are typically sought in permanent impairment claims. These include economic damages, covering both past and future medical expenses, lost earnings (past and future), and rehabilitation costs. For example, Elias required ongoing physical therapy and speech therapy, and his ability to return to his previous profession as an engineer was significantly compromised.

Non-economic damages are also a crucial component, encompassing pain and suffering, emotional distress, loss of enjoyment of life, and disfigurement. Calculating non-economic damages is highly subjective, often relying on factors like the severity of the injury, the impact on the individual’s daily life, and the length of recovery.

In some cases, punitive damages may also be available. Civ. Code § 3294 allows for punitive damages if the defendant’s conduct was malicious, oppressive, or fraudulent. This is more common in cases involving drunk driving or gross negligence.

How Do Insurance Companies Fight Permanent Impairment Claims?

Insurance companies employ a variety of tactics to minimize permanent impairment claims. They often challenge the severity of the injury, question the necessity of medical treatment, and dispute the causal connection between the accident and the impairment. They may also attempt to find pre-existing conditions to blame for the symptoms.

A common strategy is to argue that the injury is “not as bad as it seems.” They may hire their own medical experts to provide a conflicting opinion, downplaying the long-term effects of the injury. They’ll meticulously analyze your medical history, seeking any evidence to support their position. Insurance adjusters aggressively use Civ. Code § 1714, claiming comparative fault, even if the other driver was primarily responsible for the accident.

They may also delay the claims process, hoping you’ll settle for a lower amount out of frustration or financial need. It’s important to remain patient and persistent, and to seek legal counsel as soon as possible to protect your rights.

What is the Role of an Independent Medical Examination (IME)?

As mentioned earlier, insurance companies often request an IME to assess your injuries. While you generally must comply with the request, it’s crucial to be prepared. Choose a doctor who is experienced in evaluating similar injuries and who understands the complexities of the AMA Guides. Be honest and accurate in your responses, but also be mindful of how you present your symptoms.

Don’t exaggerate your pain, but also don’t minimize it. Document everything, including any pre-existing conditions, previous treatments, and your current symptoms. It’s also helpful to have your attorney present during the IME to ensure that the examination is fair and objective. The IME report is a key piece of evidence, and having an attorney can help to counteract any biased opinions.

The IME doctor will provide a report that outlines their findings, including their opinion on the severity of your injury, the need for ongoing treatment, and your whole person impairment rating. The insurance company will then use this report to determine the value of your claim. It is important to realize the adjuster will focus on the findings that support their low offer.

What Should I Do If My Permanent Impairment Claim is Denied?

If your permanent impairment claim is denied, don’t give up. You have the right to appeal the decision and pursue litigation. An experienced attorney can review your case, gather additional evidence, and build a strong legal argument to support your claim. We will negotiate with the insurance company on your behalf, and if necessary, take your case to trial. It’s important to understand your rights and options, and to seek legal counsel as soon as possible.

It’s also important to be aware of the statute of limitations, which sets a deadline for filing a lawsuit. In California, the statute of limitations for personal injury claims is generally two years from the date of the accident. Missing this deadline can result in the loss of your legal rights. Contacting an attorney promptly ensures you are not caught by a date issue.