How Are Pain Damages Calculated?
“Pain and suffering” include a variety of injuries that victims of accidents may suffer. The injuries may not be only those that happened immediately at the time of the accident. For example, if a person is in a motorcycle accident, that individual may have immediate physical injuries. If the injuries lead to an infection that warrants the need to amputate a digit or limb, the person may become disabled. Also, there may be emotional or mental effects, such as PTSD or the loss of companionship after a disability.
Pain can be physical or emotional. Quantifying and calculating the financial equivalent of pain from those injuries is a subjective and challenging process. Loss of quality of life, disability, loss of the ability to work, mental anguish, physical injuries and emotional trauma are all considered when calculating pain and suffering.
Pain and Suffering Calculation Methods for Insurance Companies
There is no standardized formula or formulas for all insurance companies to use when they estimate pain and suffering damages. They typically use data from past claims with similar circumstances to guide their decisions. Larger insurance companies typically have larger amounts of information to use in terms of the compensation amounts they offered in the past. In some cases, an insurer may enter data into a software program, and the program may suggest a settlement based on the relevant data it uses in a calculation algorithm.
Insurance companies consider the type of injury a person suffers, the expected prognosis for recovery, the amount of medical care received, who provided the post-accident medical treatment and any expectations for continual care in the future. Although insurance companies appear to look at the entire situation, the amount of compensation they offer tends to be lower than what plaintiffs with a strong case can obtain from filing a lawsuit. As a rule, it is wise to contact an attorney before accepting an insurance company’s settlement offer. An attorney will use a more in-depth and comprehensive approach to pain and suffering calculation.
Pain and Suffering Calculation Formulas for Attorneys
In California, there is no set method for calculating pain and suffering that applies to all cases. However, there are some popular methods that are used by attorneys.
Per Diem Formula
A California PI attorney will often select this method. With a per diem formula, a jury participates in choosing a daily rate of compensation for the victim. That daily rate is then multiplied by the number of days that the jury thinks the victim’s suffering will continue. Since the severity and permanency of injuries can vary in each case, the total amount can also vary. For example, if a person’s injury recovery is expected to last about a year with a daily rate of $200, the jury would multiply 200 by 365. Calculation becomes more complicated for permanent disabilities with complex emotional and mental effects.
This is one of the most common methods for calculating pain and suffering. With this formula, evidence of the injury is used to calculate damages. The evidence includes medical bills for physical or psychiatric care, related out-of-pocket expenses, lost income from work and any other financial losses. Once those numbers are added, the total is multiplied by a chosen multiplier, which may be up to four. The multiplied result is the total damage award.
Considering Other Factors
Multiplier and per diem formulas are not the only factors involved in determining a financial award. The type of injury and the location of the court are two examples of other factors that can affect the outcome. For example, some counties or courts may be less plaintiff-friendly jurisdictions than others. Also, injuries that are harder to quantify with evidence of costs and a clear prognosis can be more difficult to calculate.
Seeking Compensation as an Insured Victim
When both parties in an accident are insured, the process is not as complicated. An injured driver who is not at fault must be sure to seek emergency medical care for a full evaluation immediately after the accident. This should always be the first step before filing an insurance claim. Not seeking medical attention and delaying medical care may negatively affect a case. If the victim is insured and the at-fault driver is not, it is critical to work with an attorney to seek pain and suffering compensation. A health insurance company may cover many medical costs, but pain and suffering are not covered by personal health insurance.
Seeking Compensation as an Uninsured Victim
If the injury case is an auto accident, California law prohibits uninsured drivers from seeking pain and suffering damages even if they are not at fault in an accident. This law is called the Personal Responsibility Act. California requires all drivers to carry insurance to protect themselves and others on the road.
Pain and Suffering Evaluation Process
To evaluate the extent of pain and suffering, an attorney will work with medical professionals who understand the process. The attorney will notify the victim of any medical appointments. Depending on the type of injury, the appointments may be for physical therapy, medical examinations, imaging scans, psychiatric evaluations or something else. Attorneys know what information to seek to build a strong case with evidence of injuries, prognosis and the level of pain and suffering that a victim experiences. If the case goes to trial, all these documents are important to provide as evidence to justify pain and suffering compensation.
The first part of the entire process is contacting an attorney. The attorney will collect documentation and review it. An attorney files a lawsuit in the jurisdiction where the incident happened. The at-fault party must respond to the complaint, and the two parties’ attorneys share their information to see if a settlement can be reached. They review medical records, insurance claim information and other details. If a settlement offer is unacceptable, the victim may choose to take the case to trial. When that happens, there is a jury selection process.
After that, the judge informs the jury of the details of the case, and the attorneys for both sides present their arguments and evidence. The judge reads applicable laws to the jury, the jury deliberates and a verdict is reached. A jury may decide on a higher or lower amount than the settlement offer that was rejected. Although it is the choice of the victim to take a case to trial or not, an attorney can provide guidance to help a client make an informed decision.
Understanding Compensation Limits
Although some pain and suffering financial awards may be limited to the at-fault party’s insurance policy limits, there may be exceptions in rare cases with severe or permanent injuries if the at-fault party has other assets. For example, if an at-fault party has no assets and a limit of $15,000 for liability insurance, the case may only bring $15,000. If the at-fault party has a higher limit or extensive assets, the compensation may be more if the case’s details warrant a higher award.
Why Working With an Attorney Is Important
Working with a California PI attorney is important for better protection during the case and for a better outcome. Keep in mind that the top goal of an insurance company is to protect its own interests. The goal of an attorney is to protect the client’s interests. Although an insurance company uses automated data to offer a modest settlement, the amount is rarely enough to compensate for physical injuries and the mental anguish that comes with them. Also, insurance settlements often leave people without enough money to pay for future expenses.
An attorney considers emotional and physical effects of all injuries, the disruptions injuries cause to daily life and the effects of those disruptions on mental health. Additionally, an attorney considers the effects the injuries have on relationships, work, hobbies and other factors that relate to quality of life. The attorney also determines the severity, extent and permanency of injuries. Each case is unique, and the pain and suffering of each person can vary based on a variety of factors. It is important to have an attorney complete a full evaluation to determine if there is a case.
If you or someone you love was injured in an accident because of another person’s or entity’s negligence, you or that individual may be entitled to compensation for damages. However, there are time limits for filing PI claims, so it is important to contact an attorney as soon after an accident as possible. Personal injury attorneys in California do not collect money unless you win your case, and they are paid by receiving a portion of the settlement award. To learn more or for a free case evaluation, please contact us.