Whether it is a car accident or a premises liability case, there are two main categories of damages available to the injured individual in any personal injury lawsuit: economic (i.e. “special”) damages and noneconomic (i.e. “general”) damages.
Special damages include easily calculable losses deriving from your accident or injury, such as medical expenses, lost wages due to missed time from work, property damage, and other out-of-pocket losses. On the contrary, general damages consist of things like pain and suffering, emotional distress, anxiety, and stress stemming from the accident and your injuries. So how do you put a dollar value on your pain?
Calculating Pain and Suffering
It can be an arduous task to determine a dollar amount of general damages. However, there are a number of approaches which insurance companies use when quantifying pain and suffering as part of an injury settlement.
The following are the two common methods of calculating pain and suffering:
- Multiplier method – One approach is to add up all the special damages and multiply those by a number (known as a “multiplier) between 1.5 on the low end of the scale, and 4 or 5 on the high end of the spectrum. The multiplier will depend on several factors of your case, such as severity of your injury, your prospects for a fast and full recovery, the impact of your injuries on your day-to-day life, and whether or not the other party was clearly to blame for the underlying accident. The higher the multiplier, the higher the amount of compensation you will be awarded for pain and suffering.
- Daily rate method – Another approach is called the “per diem,” meaning “per day” in Latin. The main idea is to demand a specific dollar amount for every day you had to live with the pain caused by the underlying accident. However, justifying the date rate you use can be tricky. An effective way to ensure your daily rate is “reasonable” is to use your actual, daily earnings—with the argument being that you must endure the pain caused by your injuries every day is at least comparable to the effort going to work each day.
It is always wise to use both methods to determine a reasonable estimate. While you may receive varying results, it all comes down to how you negotiate the number that works best for you.
However, if you suffer permanent or long-term injuries, your settlement would be based on related settlements and verdicts in your jurisdiction. A lawyer typically has hands on this type of data.