The Insurance Company Says The Value of My Case Must be Reduced to Present Value.
Baltimore personal injury lawyers would probably agree this is a complicated subject, well beyond the scope of these volumes. However, the concept plays a significant role in intelligently valuing any serious automobile accident or personal injury case, and evaluating the reasonableness of any settlement. Assume an accident victim sustains a serious injury, and will require medical care of some sort, well into the future. Assume a physician opines that the amount will be 1,000 a year for 20 years. That's $20,000.
But, because wisely invested money grows over time, if a prudent investor, or an insurance company, invests just $7,537 today, in 20 years, that $7,537 may grow to $20,000.
Now, a Baltimore personal injury lawyers knows that may not take into account that every year, the injury victim is going to have to take out 1,000 for the medical care, or that the prudent investor is going to pay taxes or capital gains on the accumulations, but an understanding of the concept is vital in intelligently assessing the value of Baltimore automobile accident or personal injury case where there are long term medical costs, or any form of damage that is going to continue into the future. In fact, a jury may be specifically instructed that, when fashioning an award for future losses, they must reduce the amount the agreed upon to an amount, that if invested prudently, would grow over time, into the full amount. Unfortunately, we all know that the flip side of this concept is not as pleasant. $1000 in hand 20 years ago both a lot more than it will today.
-This Article was updated by Eric Kirk on 10/4/19.
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