A number of factors come into play when determining the value of your injury claim following a car crash. Most often, your insurance company will consider the medical bills incurred and the lost income as well as the pain and suffering. Unlike medical costs and lost wages, equating pain and suffering to a monetary value is not as straightforward. In a bid to help you understand what goes into estimating a personal injury claim, here is a comprehensive look at the formulas used to calculate the amount of damage caused by pain and suffering.
The Multiplier Formula
Under this method, your attorney will multiply actual damages (lost income and medical expenses) by a certain number. Most often, the lawyer will multiply the actual damages by three. Thus, if your medical bills amount to $5,000 and the lost wages add up to $1,000 the damage caused by pain and suffering is $6,000 multiplied by 3 to give you a total of $18,000. While the multiplier method is widely accepted as a standard formula to estimate pain and suffering damages, insurance companies are increasingly becoming hesitant to agree that multiplying actual damages by three is a realistic way to determine the amount of damage caused by pain and suffering.
Nowadays, insurance providers lean towards using sophisticated software programs to arrive at pain and suffering damages. The multiplier used depends on the severity of your injury, the amount of time you took to recover from your injuries and any other aggravating circumstances. For example, a person who breaks a femur and undergoes multiple surgeries is considered to have experienced more pain and suffering in comparison to an individual with a slight fender bender. In short, the more serious the accident is, the higher the multiplier. In the above example, the multiplier may be three or four for the person with a broken femur and one or two for the person with a minor fender bender. Aggravating circumstances such as the negligence of the at-fault driver can push the multiplier even higher. Equally, if you were partly or wholly to blame for the accident, a smaller multiple might be used to determine the monetary value of your pain and suffering. Note that that type of the treatment will also be a consideration to determine a reasonable multiplier. Be warned not to over-treat your injuries with a hope to push the value of pain and suffering higher. Your insurance provider might be reluctant to use excessive medical expenses as a parameter to calculate pain and suffering.
The Daily Rate Formula
Your personal injury lawyer or insurance company may use daily rate to calculate the worth of pain and suffering after a car crash. Also known as the “per diem” calculation, the daily rate method allocates a specific amount of money to each day or week. For instance, let’s assume you incurred medical bills worth $5,000 and $1,000 in lost income. You also visited your doctor on a regular basis and took medicines to relieve the pain for three months. After three months, the pain is over, and you are in a position to resume your day to day activities. When calculating pain and suffering damages, your attorney will allocate a daily value of $200 multiplied by 90 days (3 months) to give a total of $18,000. What determines the daily rate you ask? Once factor can be your everyday income or an arbitrary figure.
Determining the Final Value
The best way to make a better estimate is to calculate pain and suffering damages using both formulas to come up with an approximate value. Your lawyer can then carry out the necessary adjustments using the following factors:
The severity of your injuries
Other people involved in the accident and sustained injuries
Permanence of your injury
The period you were out of work
Whether you were laid off as a result of not going to work
Whether you have strong evidence to present before the jury
Seeking Legal Help
The process of calculating pain and suffering after a car accident is intricate. To get a value that is equal to the turmoil you underwent, engage the services of a personal injury attorney in your area. Among other things, the lawyer will write a demand letter and carry out the negotiations on your behalf.