No insurance adjuster will ever tell you or your attorney exactly how they calculated your settlement while working on your claim. Even the most knowledgeable and seasoned injury attorneys are not given the exact formula that insurance adjusters use to calculate a settlement amount. However, there is a general guideline that considers liability and the pain and suffering the victim has endured. Your attorney will fight aggressively to prove your losses while providing you support and compassion during this difficult time.
What are damages?
In order to understand how your settlement is calculated, you must first understand what goes into it. Your settlement is based on the damages that you are owed. There are two types of damages: economic damages and non-economic damages. Your attorney will fight for you to receive the maximum compensation for both categories.
Economic Damages
Your economic damages are your financial losses. These include:
Your medical expenses, including all treatments, surgeries, medications, visits with specialists, and physical rehabilitation
Your lost wages, based on your income
Your future lost earning potential if you will continue to miss work in the foreseeable future due to your injuries
Property damage, such as the cost to repair or replace your vehicle
Economic damages also include out-of-pocket expenses. Before you were injured, you probably were able to go to the store to buy groceries, drive your vehicle to pick up your kids from school, or provide domestic services in your home. If you had to hire a third party to provide these services to you, then you can claim those costs in your damages. An attorney can speak with
you personally if you are self-employed or own your own business and you have questions about how your lost wages are calculated.
Non-Economic Damages
The courts also recognize that victims of personal injuries suffered non pecuniary losses. These subjective losses, pain and suffering, have a deeply traumatic effect on the victim. Examples of non-economic damages that you can file for compensation for include
Emotional distress
Post-Traumatic Stress Disorder (PTSD)
Mental anguish
Loss of companionship
Loss of consortium
The greater your injury, the greater your suffering and losses. If you suffer from permanent disfigurement, lost the use of a limb or organ, are paralyzed, or had to endure multiple surgeries, then your subjective traumatic experience will be taken into consideration when calculating your settlement.
The Multiplier Method
Now that you understand what goes into the calculation, the next step is to understand how the calculation is done. All of your economic damages can be calculated to come up with one total number encompassing all of your financial losses. But non-economic damages do not have a dollar amount attached to them. Instead, the severity of your pain and suffering is used to determine the multiplier that is then used to calculate your economic damages to come up with the settlement amount. A multiplier can be between 1.5 and 5, and the more severe the injuries and suffering, the higher the multiplier.
If you suffered minor injuries that can heal on their own with over-the-counter pain medications and ice packs — such as whiplash or bruises — then your multiplier can be as low as 1.5. If you suffered internal bleeding, traumatic brain injuries, or spinal cord injuries, your multiplier could be as high as 5. If, for example, you broke your leg in an accident and needed to wear a cast for several months, then your multiplier could be around 3.
An example can help elucidate how a settlement is calculated. Jane is struck by a drunk driver who was speeding. The force of the impact made her internal organs hit the inner walls of her chest and bones, leading to life-threatening internal bleeding. She underwent life-saving surgery and was in the ICU for several weeks. She was unable to finish courses for her master’s degree and could not graduate with her cohort or get the pay raise she expected with higher education.
The accident has been stressful for her husband, who takes care of her while working a full-time job. As you can see, Jane has not only suffered physically, but her dreams and her relationship have been affected by the driver’s negligence and recklessness. If her total economic damages came to $125,000, her multiplier could be as high as 5, resulting in a $625,000 settlement.
How Hiring A Personal Injury Attorney Helps
It’s important to hire a personal injury attorney if your damages are significant and you are seeking a considerable amount of money. For minor injuries, such as whiplash, the claimant is not necessarily seeking a large sum of money. But when the claimant has had serious injuries that have prevented them from working, and they are asking for a large sum of money, the insurance company will want to be sure that they have to pay that amount.
The insurance companies are not on your side; they are focused on saving themselves money. They are reluctant to pay large amounts in claims. Your attorney, on the other hand, does have your best interest at heart. A personal injury attorney exhausts all their resources to demonstrate how much the accident has affected your life and to prove that you deserve every
dollar.
There are many services and resources that a personal injury attorney provides that would be difficult for an injury victim to do on their own. A personal injury attorney deposes witnesses, including expert witnesses, to provide their testimony for your case. An expert witness is an authority in law enforcement, medicine, accident reconstruction, or anatomy and physiology, whose testimony can provide greater insight into how your accident and injuries occurred. An attorney also negotiates with the insurance company on your behalf so that you can focus on your healing. Many insurance companies try to use tricky language to get victims to say something wrong that would make them more liable for the accident, but they won’t pull these tricks with an attorney. Don’t risk representing yourself. Hire an experienced and proven personal injury attorney today.
