C & R question

[Collins]

Of a total claim, what percentage does the insurance company typically pay with a C&R? I know your first answer will be as little as possible. I am sure, though, that ones in this forum has already gone through a C&R, so I am looking for an intelligent answer. Though cases do vary and everyone makes thier own decision, I just want a reasonable expectation based on those here who have already gone through it. I am in California.

[1171]

can't be as little as possible as comp court has to approve. comp court won't approve C&Rs that are not adequate based on the evidence.
generally the carrier/employer sets up a range of settlement values and looks at paying in the middle.
e.g. lowest rating and optimal future medical vs highest rating and potential worst case medical.
they look at life expectancy for future medical and use present value discount calculations to develop the settlement range.

example:

20% PD rating and 40%PD rating
minimal future medical of $150/yr for life
max medical $2000/yr for next 10yrs and 1000/yr for remainder of life.

low range= (20% PD plus $150 x Life expectancy) x Present Value @ 6%
high end= [40%PD plus 20K plus (1000 x Life Expectancy-10)] x present value @ 3%

they would like to settle at the midpoint of the 2 calculations.

while there is a specific formula for calculating permanent disability benefits there is no easy way to predict medical needs, usage & costs --- other then experience and use of the doctors recommendations in the medical reports.

if they project their future costs to be between $10K and $50K they would try to hold the C&R to $30K or less.