gavel and settlement money

How Do You Calculate Pain and Suffering?

This is frequently one of the most baffling questions for people dealing with an injury. We find that clients often have questions about damages when thinking about a personal injury claim. Questions about calculating pain and suffering are also common. How do you put a dollar amount on the physical and/or mental pain a person might suffer after a serious accident? How do you know if an insurance company has made a fair offer, or if you should ask for more?

In personal injury cases, including car accident claims, slip and fall lawsuits, plane crashes, and more, there are typically two main categories of “damages” available to the injured person. In this situation, “damages” is simply a legal term for “losses.” The two categories are economic (also called “special”) damages and non-economic (“general”) damages.

Special damages usually include the more easily calculable losses resulting from an accident or an injury—for example, your medical bills, your lost income due to time missed from work, your property damage, such as a totaled car, plus any other out-of-pocket expenses. General damages include things like pain and suffering—this may mean discomfort and physical pain, but can also mean emotional distress, anxiety, PTSD, and other effects of the accident and your injuries.

When a personal injury lawsuit is successful, the compensation awarded to a winning plaintiff after a trial is based on these two different categories of damages. Settlements reached out of court—which are also common—will be based on similar factors. This brings us back to the question of how to place a dollar value on something as personal as “pain and suffering”?

Quantifying Pain and Suffering

You might be thinking that it would be hard to select a monetary amount for general damages, and it is. Most people we talk to have no idea how to put a dollar amount on things like physical pain and emotional distress. However, the only way a court can award damages is by doing exactly that. So when an insurance adjuster makes a personal injury settlement offer, there are a variety of approaches the adjuster might use when trying to determine pain and suffering. The two most frequently used are the “multiplier” method and the “per diem,”or daily rate, method.

Multiply Your “Specials”

One common approach is to add up all the special damages—the more easily calculable economic losses—and multiply those by a number between 1.5 on the low end, and 4 or 5 on the high end.

This second number is called a “multiplier”. It will depend on many factors related to your case, including the severity of your injuries, your health care provider’s expectations for a quick and complete recovery, the impact of your injuries on your day-to-day-life, and whether or not the other party was obviously at fault for the accident. The multiplier method is believed to be most commonly used by insurance adjusters. 

Often the point of disagreement in settlement negotiations is the multiplier used. The injured person and their attorney will suggest a higher multiplier. Not surprisingly, the defendant or their insurer will seek to use a lower multiplier. 

Another method of calculating pain and suffering is called the “per diem” method. “Per Diem” means “per day” in Latin, and the idea is to ask for a certain dollar amount for every day you had to deal with the pain caused by your accident.

This approach has some difficulties, especially when it comes to justifying the daily rate you use. One way to make sure your daily rate is “reasonable” is to use your actual, daily earnings. The argument here is that having to deal with the pain caused by your injuries every day is at least comparable to the effort of going to work each day.

Here’s an example of the “per diem” method. Let’s say that you were driving your car when another driver rear-ended you. As a result, you suffered a painful whiplash, or neck strain. You now have to wear a neck brace and take pain pills for three months. You are still suffering for another four months after that, for a total of seven months, or about 230 days of pain and discomfort. Now let’s say that at your current or most recent job, you make about $60,000 per year—that’s about $240 a day if you divide your salary by 250 working days per year.

Now you’ll want to multiply your $240 daily rate by 213 days of pain, and you arrive at $51,120.

There are limitations with the “per diem” method. It often doesn’t work with permanent or long term-injuries. Your lawyer will help you file a lawsuit in this case, and your settlement would be based on related or similar verdicts in your jurisdiction—data that only lawyers usually have access to.

Use Both Methods and Adjust For Accident Specifics

If you’re unsure of what method to use, you can use both methods to start, and then adjust your demand from within that range. It’s common to get drastically different numbers—it often becomes a negotiation eventually. Whether you should lean closer to the high or low amount depends on the circumstances of the accident. If you were hit by an obviously impaired driver, or someone known to have been texting and driving, and have a large amount of medical bills, you should start on the highest end of your settlement range. On the other hand, if you slipped and fell on slippery pavement outside of a private home, and liability is not so clear, your settlement demand should probably start closer to the lower end. Each case is unique, and an attorney can help you arrive at a reasonable number that you can justify in a demand letter.

To get started, schedule a free case evaluation with the team at The Law Offices of David M. Benenfeld, P.A. today. We know waiting for compensation is hard, especially when you have medical bills and expenses continuing to pile up.

Explore your legal options now by calling us at 954-677-0155 or request more information online about our legal services.