How Insurance Companies Determine Pain and Suffering Damages

Anytime a person is injured due to the careless or negligent actions of another individual or business, they should be entitled to various types of compensation. Most people understand that injury victims will receive coverage for their medical bills, lost income, and general out-of-pocket expenses, but victims can also recover compensation for various types of pain and suffering damages. However, insurance carriers are notoriously difficult to deal with when it comes to determining pain and suffering damages. Here, we want to discuss how insurance carriers determined the amount of compensation a person should receive for their non-economic losses.

What is Pain and Suffering After an Accident?

In the aftermath of a vehicle accident or any other type of injury, a person will sustain various types of losses. Pain and suffering will be considered a non-economic loss because this is typically more difficult to calculate than other types of losses, such as medical bills and lost income.

Pain and suffering are more immeasurable and can include various types of emotional and psychological trauma a person experiences, including feelings of anger, grief, worry, anxiety, and even post-traumatic stress disorder (PTSD).

How Does the Insurance Carrier Handle Pain and Suffering?

First, it is important to point out that insurance carriers are going to do anything they can to limit the amount of money they payout in a settlement. One way that they do this is to minimize the amount of compensation they pay for a person’s pain and suffering. There is no set rule for how insurance carriers calculate pain and suffering damages.

There are generally two methods that personal injury attorneys will use to calculate pain and suffering and then send a demand letter to the insurance carrier for payment.

• The first method is to add up all of the economic expenses (medical bills, lost wages, out-of-pocket expenses, etc.) and then multiply that total by a set number (usually between 1.5 and 5) to reach the total for pain and suffering damages. This is called the multiplier method. For example, if a person sustains $10,000 in economic damages, an attorney could use a multiplier of three to reach a total of $30,000 for pain and suffering damages.
• An alternative method to use in these situations is called the per diem (per day) approach. Using this method, a certain dollar amount will be assigned to every day from the time the accident occurred until when the plaintiff reaches maximum medical recovery. For example, suppose $100 was assigned as the per diem amount and that it took 200 days for the injury victim to recover. In this case, the total pain and suffering damages would be $20,000.

Insurance carriers often use complex computer algorithms to determine how much they should offer a person for their pain and suffering. These programs will take into account the type of injury and the type of medical treatment the person sought.

It is crucial for any injury victim to seek assistance from a skilled personal injury attorney in Mesa. Determining pain and suffering compensation, as well as the other types of compensation after an injury claim, can be incredibly challenging. An attorney can work with all parties involved to negotiate a fair settlement on behalf of their client.