If you are injured in an accident and have decided to claim compensation for it, you may be wondering how much you can claim from the insurance company. It is easy enough to determine how much you will be paid for your medical expenses as these are quantifiable damages – it’s simply a matter of adding up your bills and receipts. But for your losses that are less objective – such as your physical pain and emotional distress – your insurance adjuster will use a different method.
Three Methods Of Calculating Pain And Suffering Compensation
Since pain and suffering are losses that have no exact monetary value, the insurer may have their own way of determining how much they will pay for these losses. In general, there are three calculation methods to determine the amount.
One is the “multiplier” method. Here, the insurance adjuster takes the total amount of your quantifiable damages (also known as “special damages”) then multiplies it by anywhere from 1 to 5. The multiplier depends on a variety of factors such as the severity of your injury, its effects on your life, and even your own persuasiveness.
For instance, if you have suffered from a broken leg after a car crash, your adjuster may decide that this injury is worth the multiplier 3. So if your special damages amounted to $5,000, the adjuster multiplies this by 3 and thus offers you $15,000.
Another calculation method is the “per diem” (or per day) rate. In this method, your pain and suffering are assigned a specific dollar amount, and that amount is multiplied by the number of days you will likely endure until you fully recover. So essentially, it is a ‘daily rate’ for the days you will live with pain and suffering. Typically, that daily rate is equal to your day’s earnings, or a similar estimate.
These two techniques are commonly known, but they are also considered outdated. Your injury lawyer might use either of these simply as a way to get a rough estimate of what you deserve. However, many insurance companies now use a modern method, using a computer software to arrive at their own estimate. These digital programs take into account the various factors around your pain and suffering, which the adjuster still has to input into the computer.
Regardless of which method the insurance company uses, remember that you can negotiate for higher compensation. What’s important is that you have an idea of what a fair settlement is, and that you can be assertive and honest when negotiating for it. For your best chance of obtaining the maximum amount you deserve, let an injury attorney work with you and fight for you throughout the negotiation process.