How Are Personal Injury Claims Calculated?

If you’ve been injured by someone else’s negligence and you’re filing a personal injury claim, you may wonder how compensation is determined for claims like yours. You may have heard of some very large personal injury settlements and wonder how lawyers or a judge arrive at these payment amounts. In this guide, we’ll go over the various factors that can be involved in determining personal injury compensation.

Medical Expenses

The most obvious portion of personal injury compensation is payment for your medical expenses. The insurance company of the person liable for your injury should pay all of your medical bills. This is why personal injury attorneys will not want to send a “demand” to the insurance company for payment until you have completed treatment for your injury. You and your attorney will want to know the exact amount that you are asking the insurance company to pay.

This portion of your compensation is fairly straightforward, although, as they say, the devil can be in the details. The insurance company may want to argue about procedures they don’t deem “medically necessary.” However, an experienced attorney will know how to negotiate on your behalf in this situation. Ultimately, a number will be determined based upon your actual medical expenses that both parties can agree on.

Disability and Future Medical Expenses

Usually, your attorney will want to wait for you to complete medical treatment for your injury before moving forward with your claim. However, if your injury results in a permanent disability or will require continued medical care indefinitely, this may not be possible. In this case, payment for future medical expenses should be included in your claim. Of course, it’s tricky to estimate exactly what those costs might be, but an experienced attorney, assisted by experts, can put forward a reasonable estimate of this amount to be included in your overall compensation.

Lost Wages

If you miss work due to your injury, then compensation for your lost wages is another portion of your personal injury claim. Again, because insurance companies are involved, they will want to calculate this number exactly. This is fairly simple if you work a set schedule with regular pay or a salary. It can be more difficult if you are self-employed, an independent contractor, or have an irregular schedule. Either way, it is good to have an attorney on your side making sure the amount is fair and correct.

Future Lost Income

If your injury is serious enough that it will affect your ability to work and earn a living in the future, that should also be considered as part of your overall compensation. This number will be more difficult to quantify than past lost wages that you can concretely prove. Many personal injury attorneys will hire a forensic accountant to help determine a realistic amount for your future lost income and to provide evidence to back up that number.

A Note on Property Damages

If you were injured in a car accident, your vehicle was almost certainly damaged as well. Damage to your vehicle and other personal property due to an accident is generally recoverable from the liable person’s insurance company. However, property damage claims are usually made separately from your personal injury case.

It is possible to settle your property damage claim while keeping your personal injury claim open; however, you should carefully read any release paperwork that the insurance company wants you to sign. If you still want to pursue your personal injury case, you don’t want to sign away your right to do that by setting your property damage claim.

Pain and Suffering

The factors discussed above, such as medical expenses and lost wages, are known as “special” damages. The term “special damages” simply refers to economic damages—losses that can be assigned a concrete dollar amount. The other portion of your personal injury claim is comprised of “general” damages, that is, non-economic damages. We usually call these “pain and suffering” damages.

Pain and suffering is the part of your claim that is difficult to quantify. Things like future lost wages may require an expert’s help to calculate, but they do ultimately boil down to a dollar amount. It is much harder to assign a dollar value to highly subjective experiences like pain and suffering.

Each personal injury case is unique, and the specifics of what constitutes pain and suffering will differ, but there are a few broad categories to consider when assessing pain and suffering damages.

  • Physical pain
  • Psychological and emotional pain, or “mental anguish”
  • Inconvenience

Physical pain is easy for most people to understand, and it can be somewhat quantified using medical records from your treatment. The severity of the pain will be considered when determining compensation, as will the duration of the pain, or how long it lasted or will last. So, for example, a broken bone that healed well and no longer causes the injured person pain would be considered less severe than a more complex injury that will continue to cause the injured person pain in the future, despite doctors’ best efforts at treatment.

Mental anguish can be more difficult to quantify and show evidence of, although in some cases, mental anguish is readily apparent to the general observer based on the circumstances and severity of the injury. Psychological and emotional pain can stem from many aspects of the injury and its aftermath. Some possible sources of mental anguish include:

  • Disability – if you are permanently disabled due to an injury, this is obviously a source of significant distress, as it vastly alters nearly every aspect of your life, and requires considerable psychological resilience to adjust to.
  • Scarring or disfigurement – if your injury leaves you with significant scarring or other permanent damage that is readily visible, this is a clear source of emotional distress and embarrassment.
  • Psychological effects – a serious injury can lead to a host of unpleasant psychological effects. The injured person may suffer from post-traumatic stress disorder (PTSD) or severe anxiety due to the traumatic nature of the accident that caused the injury. The difficulty of a long recovery, or of learning to adapt to a permanent disability, can lead to depression. The injured person’s relationships may suffer due to the stress of continued medical treatment and caregiving. The list goes on.

Inconvenience can also encompass a wide range of situations. Some possible sources of inconvenience that may be considered when awarding compensation include:

  • Repeated travel for doctors’ appointments, physical therapy, or other treatment
  • The difficulty of performing normal daily tasks while in recovery—or on a permanent basis if your injury causes disability
  • Falling behind at work or school
  • Missing important events with family and friends
  • Not being able to participate in previously enjoyed activities, such as sports or other physical activities

All of the above factors are considered when determining compensation for pain and suffering. But that still leaves the problem of assigning a monetary value to non-monetary harm. There is no specific process or formula that is legally mandated for determining pain and suffering. However, the multiplier method is probably the most commonly used. The multiplier is based on your economic damages. Based on the severity of pain and suffering, the amount of the economic damages is multiplied by a number between one and five. The greater the pain and suffering, the higher the multiplier.

If pain and suffering is relatively less serious, it might merit a multiplier of two, meaning the pain and suffering portion of the claim payment would be double the amount of economic damages. The more severe the pain and suffering is determined to be, the greater the multiplier. Of course, the injured person and the insurance company often disagree on what the multiplier should be. This is where having an experienced attorney on your side can make a big difference.

The Richmond injury attorneys at Geoff McDonald & Associates offers free initial consultations. If you’ve been injured at the fault of someone else, contact our offices for an evaluation of your case. You can reach us through our online form or by calling (866) 369-9051.