Curious about how much pain and suffering is worth?
Most people have no clue. And that’s a problem. Because pain and suffering can easily be the largest component of your injury settlement.
Here’s the deal:
Insurance companies hire whole teams of people whose sole job is to minimize these payouts. If you don’t know how they work…you’re leaving a lot of money on the table.
The good news? Once you understand how insurance companies calculate non-economic damages, it’s not so scary. In fact, with the right insurance claim assistance services behind your case, you can fight back and get the compensation you truly deserve. Head over to https://claimclimbers.com/ to learn how.
What you’re going to learn:
- What Are Non-Economic Damages?
- How Insurance Companies Calculate Pain and Suffering
- What Are the 2 Main Methods of Calculation?
- What Factors Influence Your Settlement?
- How to Strengthen Your Pain and Suffering Claim
What Are Non-Economic Damages?
Non-economic damages are monetary compensation for losses that don’t have a preset dollar amount.
You can easily quantify medical bills or lost income from a job. But non-economic damages involve the less tangible ways an injury affects someone’s life. Monetary losses are easy to calculate. Non-economic damages are subjective.
Examples of non-economic damages include:
- Physical pain and continued discomfort
- Emotional trauma and mental anguish
- Loss of enjoyment of life
- Anxiety, depression, PTSD
These are very real injuries. They just don’t come with a receipt. Which is why insurance companies want to minimize them.
How Insurance Companies Calculate Pain and Suffering
There’s no cookie-cutter formula that applies to every pain and suffering claim. Each situation is unique.
The severity of the injury, length of recovery, and future impact on quality of life all factor in.
But here’s what you might not realize…
Recent data from Thomson Reuters shows that the median payout for pain and suffering hovers around $25,000. This middle value was calculated across hundreds of auto injury cases. The average payout was significantly higher at $137,277.
But keep in mind.
That average gets skewed by some extremely high settlements. Some pain and suffering claims can land in the six figures. Others settle for only a few thousand dollars. Knowing how the process works puts you in the best position to maximize your recovery.
What Are the 2 Main Methods of Calculation?
Insurance adjusters use two main methods when calculating pain and suffering damages. Both are commonly used throughout the industry, but function in very different ways.
Method 1: The Multiplier Method
Most claims involve this method. It takes all of the economic damages (medical expenses, lost wages, future costs) and multiples them by a number between 1.5 and 5.
Let’s say you have $40,000 in economic damages and your multiplier is 3. You would then receive approximately $120,000 for pain and suffering.
That multiplier is determined by the severity of the injury.
- Minor soft tissue injuries = 1.5x – 2x multiplier
- Moderate injuries with prolonged recovery = 2.5x – 3.5x
- Severe injuries or injuries resulting in permanent damage = 4x – 5x (or more)
Easy enough, right? Here’s the hard part. Insurance companies will fight you on the multiplier. They will try to push the number as low as possible.
Method 2: The Per Diem Method
Per diem means “per day” in Latin. Using this method, the insurance company assigns a daily rate to your injuries. This dollar amount gets multiplied by the number of days you’re expected to suffer.
Let’s say your injury warrants $200 per day. You were injured on January 1 and are expected to fully recover by June 30. That’s approximately 182 days.
$200 x 182 days = $36,600 in pain and suffering damages.
This method works really well for injuries with a clear recovery period. Once you’re better, the injury stops affecting you.
But…there’s a catch.
What if you never really recover? This method isn’t ideal for chronic injuries or injuries that result in permanent damage. For those cases, insurance companies will likely opt for the multiplier method.
What Factors Affect Your Settlement?
Unless the injury happened on your front doorstep, each case differs based on dozens of different factors.
Some of the biggest factors include:
- The severity of your injury. Any injury that results in permanent scarring, disfigurement, or pain will increase your settlement value.
- Medical records. Detailed documentation from your doctor, therapist and/or specialist helps to prove suffering.
- Loss of normal activities. Injuries that affect your ability to work, exercise, or enjoy hobbies/pastimes will increase your settlement value.
- Length of recovery. This tends to play a big role in non-economic damages. The longer you’re injured, the higher the payout.
- Your credibility. Being consistent and honest with insurance companies and jurors is vital. Any signs of dishonesty can sink your claim.
According to statistics from Clio, about 95% of personal injury lawsuits settle prior to trial. This means nearly every pain and suffering payout is decided during negotiations. Having your ducks in a row cannot be overstated.
How To Strengthen a Pain and Suffering Claim
Figuring out how insurance companies calculate pain and suffering is important. Equally important is knowing how to prove those damages.
Here are a few of the best ways to build a rock-solid case:
- Maintain a pain journal. Take notes about your pain levels, emotional wellbeing, and daily limitations.
- Don’t miss any doctor appointments! Giving the insurance company an excuse to cut your settlement is never a good idea.
- Seek out specialist opinions. Medical documentation from psychologists and pain management doctors can be very compelling.
- Hold onto any and all evidence. Photos, prescription bottles, medical bills, you name it. Save everything.
- Keep your social media accounts private. Believe it or not, insurance adjusters will dig through your social media history and use posts against you.
No stone should be left unturned. The more evidence you have to prove your pain and suffering, the more likely you are to receive a fair settlement.
Bringing It All Together
Hopefully now you understand pain and suffering damages a little better. Non-economic damages account for the intangible ways an injury impacts your life.
With two common calculation methods and numerous factors that can influence the payout, insurance companies have plenty of tools to lowball injury victims. That’s why having the right insurance claim assistance services matters.
The goal is to leave no stone unturned and build an unbeatable case that maximizes your injury settlement. Don’t settle for less than you deserve.
Once again, here’s what you learned:
- Non-economic damages refer to pain, emotional trauma, and loss of enjoyment of life
- Insurance companies typically use the multiplier or per diem method to calculate pain and suffering
- Factors such as injury severity, medical documentation, and impact on daily life determine the payout amount
- You can maximize your settlement with detailed documentation
