How Insurance Companies Calculate Pain and Suffering

Posted on by datateam

When going through a personal injury case, victims are seeking compensation for damages, some of which are easy to calculate like medical expenses, lost wages, property damages, and other out of pocket expenses. These elements have quantifiable numbers, which victims can prove through documentation.

However, some other damages aren’t so straightforward. One common type of damage that is less easy to quantify or prove is pain and suffering, which is the idea that victims should receive some form of monetary compensation for any physical and mental anguish. The challenge is putting a numerical value on such an abstract concept. Courts use two main methods for calculating pain and suffering.

Multiplier Method for Calculating Pain and Suffering

One of the most widespread methods for determining pain and suffering is the multiplier method. This approach takes all the easily calculable damages with set numerical values (medical bills, lost wages, etc.) and then multiplies the sum of these special damages by a multiplier.

The question then becomes the number to multiply for a final amount. A factor of 1.5 is close to the lower end, while 4 and 5 are higher values courts often use to convey great amounts of pain and suffering. Factors that will impact the multiplier include the impact of injuries, the likelihood of recovery, and the level of liability the responsible party.

Most insurance companies are likely to use the multiplier method when determining what level of compensation they’re willing to pay in a settlement. When it comes to the courtroom, an insurance company will aim to pay a lower multiplier, while most plaintiffs tend to aim for higher numbers.

Pain and Suffering Calculations Using the Per Diem Method

Another approach for determining pain and suffering compensation is the per diem, or per day, method. This approach uses a daily rate for calculating an amount to someone’s suffering. If you’re suffering from an injury due to another’s negligence and are considering damages for suffering using the per diem method, it’s important to set a reasonable daily value. One common approach is to set a daily rate to roughly how much you earn per working day. From there, you can multiply the daily value by your expected days of suffering to arrive at a compensation amount.

What to Do for Proper Compensation

While these two methods of calculating pain and suffering damages often come into play, many other elements will determine how likely victims are to receive such compensation in court. One way victims can help their case is to report all pain and discomfort to medical professionals. Documentation of such issues can make strong personal injury cases.

Additionally, while these two methods are some of the most common for determining pain and suffering values, they can reach very different results. Instead of relying on one, it’s best to know what compensation values would be under both the multiplier and per diem methods. Doing so offers a range of values for determining pain and suffering amounts.

To help you get a better grasp on the extent of all your potential damages, it’s best to have the help of on experienced personal injury attorney on your side. An attorney can help you decide the best way to determine a numerical value to your pain and suffering.