How Do Insurance Companies Calculate Pain & Suffering?

Car Accidents,Injury • June 1, 2020

When you pursue compensation for damages caused by a crash resulting from another’s negligence, you are seeking to be reimbursed for the cost of your medical treatment and the lost income resulting from your injuries. However, these tangible, economic losses are not the only way you can be harmed following a crash. The experience of long-lasting pain caused by your injuries did not cost you a lot of money, but it does constitute damages for which you deserve compensation. Also, severe collisions and painful injuries can cause a chain reaction impacting the victim’s emotional state, including anxiety, insomnia, depression, and grief. All of these physical, emotional, and mental anguish usually is included under the category of pain and suffering damages

Determining the value of a victim’s pain and suffering following a crash can be difficult compared to other types of damages. It is fairly simple to calculate the value of a six-week course of physical therapy. You just have to consider the medical bill for the procedure. However, there is no clear dollar value assigned to the dull ache at the base of your neck that turns into a shooting pain when you turn your head too far to the left. The insurance provider liable for covering your injuries understands that you need to be compensated for pain and suffering resulting from the crash. They also know that if they fail to provide you with that compensation, they may be forced to do so by a jury. However, there is no set method used by insurance companies to calculate damages for pain and suffering damages.

The Multiplier Method

Some believe that the most common method of calculating the worth of pain and suffering is to use the economic damages sustained by the plaintiff as a base figure — like the total cost of their medical expenses — and apply a multiplier to that number. The multiplier, usually from one to five, is calculated by the perceived severity fo the suffering experienced by the injured victim. Certain kinds of injuries are more likely to result in a higher multiplier, such as broken bones and facial scars, with bruising and sprains usually having a much lower rate. Using this method, the crash victim who suffers a broken leg may recover around $5,000 in medical bills, and he or she may be able to estimate that their pain and suffering damages could be worth a factor of three, or $15,000. Most New Jersey personal injury lawyers reject this old-fashioned method fo determining fair settlement value. 

The “Per Diem” Method

Another way to estimate the worth of pain and suffering damages is the “per diem” method. Like other legal terms, the phrase per diem is from Latin and means “per day.” Using this method, a fixed dollar amount is placed on the suffering you experienced resulting from your injuries, and you would multiply that value by the number of days beginning from the date of the crash to the day your physician determines you have reached your maximum medical recovery, or that you’ve healed as much as your body is capable of. This value is the estimated total worth of your pain and suffering damages. Court rules in New Jersey allow a personal injury lawyer at trial to argue based on the “time unit rule” but will not allow the lawyer to suggest a multiplier or bottom-line figure that should be awarded.

Computer Programs

How Does the Insurance Company Calculate Pain & Suffering?These methods are usually used by New Jersey personal injury lawyers to help injured parties calculate approximately how much they should expect or ask for when negotiating with the insurance provider. The insurance companies are under no obligation to adhere to these methods. The majority of insurers have injury calculation software that will consider many factors about each plaintiff’s case, such as the injury diagnosis, the type of treatment required to treat the plaintiff, and the duration of the treatment. For example, if two patients have the same neck injury symptoms, but one sees a physician for care while the other is treated by a chiropractor, the insurer will regard the former claimant’s injury as more severe and more deserving of compensation. A lot of information is required for the computer program that may not be relevant to the case, but the insurance provider will follow the program — sometimes beyond reason. 

To some degree, pain and suffering can be assumed from a diagnosis, but it is useful to have specific evidence of how your injuries have caused you suffering and upset your life. Any kind of documentation that shows your pain and difficulty, including private journals or testimony from friends and family, can be used to prove that you are suffering. Some types of suffering, including anxiety, depression, phobias, sleep disturbances, and other mental health-related conditions, should be supported by evidence of treatment by a mental health professional. 

Once you have determined what a reasonable figure for your pain and suffering damages should be, talk with a skilled New Jersey personal injury attorney and decide if the insurance company’s offer for compensation if fair. If you have chosen the right personal injury lawyer on your side, he or she will be able to tell you a range in which cases like yours usually settle for. 

New Jersey Car Crashes

After an accident, pursuing a personal injury claim can leave victims seriously confused and frustrated. You need a firm understanding of the law to make sure that your legal rights are protected. Instead of trying to figure it out on your own, you should contact a New Jersey car crash attorney

Brady Reilly & Cardoso, LLC has over 50 years helping the residents of New Jersey by providing aggressive legal representation after being injured in an auto accident. We are known for our attention to detail and the ability to bring your case to a successful resolution. Give us a call today at (201) 997- 0030 to discuss your case.