If you make a personal injury claim after a car accident, you will wonder how much you should ask for and what your claim could be worth. Different auto insurance companies use different methods to determine the value of your personal injury claim. The claim generally includes payment for your medical bills, lost income, and a certain level of compensation for your pain and suffering.
There are two common ways that a car accident claim is valued so that you and your attorney have an idea how much you should ask for your pain and suffering after a car accident.
The most often used method for determining pain and suffering damages after your accident is to multiply the actual damages – your medical costs and lost earnings – by a certain figure. Many personal injury attorneys are trained to multiply your actual damages by three to obtain a typical, reasonable damages amount.
Thus, if your medical costs were $5000 and your lost earnings were $1000, you multiply $6000 by 3 and get $18,000. But in recent times, some insurance companies are not as willing to concede the three multiplier as a reasonable way to quantify your pain and suffering.
Today, the more common approach by insurance companies is to take your actual damages and multiply it by a figure that is determined by a software program. Typically, this type of operation will undervalue your claim. The multiplier depends upon how serious your injuries area, aggravating factors, and how long your recovery is. For example, if you have a broken femur and must have three surgeries, the pain and suffering from this is going to be a lot worse than if you just had your fender damaged.
Thus, in a more serious crash, the multiplier can be three or four, whereas in a fender bender, it would not be more than one or two. The multiplier could be higher if there are aggravating factors, such as the negligent driver was drunk. In that situation, you could use a higher multiplier. Also, if your actions were partially the reason for the crash, a lower multiplier may be used to determine how much your pain and suffering damages are.
The Daily Rate
Some auto insurers today and personal injury attorneys use a daily ‘per diem’ to calculate your pain and suffering on an injury claim. Under the per diem method, the amount of money is assigned to every day or week that you suffered from your injuries after a car accident.
For instance, let’s suppose you incurred medical bills of $5000 and lost wages of $1000 for a total sum of $6000. For 90 days after the crash, you saw your doctor regularly and took pain medication every day. After those 90 days, the pain was less and you could resume many of your normal activities. You may assign a daily value of $200. For the per diem method, multiply 90 times $200 to reach a figure of $18,000.
How is the daily rate chosen? One way is to look at the income that you make in a regular day if you were not hurt. So, if you make $200 on a regular day, but could not work, this could be a reasonable method of valuing your pain and suffering.
It could seem rather arbitrary to choose the per diem number, you and your attorney should be able to explain a good reason why you chose that amount. This is because when you to before the jury or judge, you cannot just say your pain and suffering is worth $XXX and have no reason for it.
Arriving at a Fair Value
We think the most efficient and systematic method to value your pain and suffering is to use the per diem and multiplier to get a rough figure. From that point, you could need to adjust the expectations you have based upon several case factors, such as how severe the injuries were, whether other people were injured, whether you were out of work for a long time, and whether you seem to be a strong witness for your behalf.
Putting these factors together will help you to make a good and reasonable value for your personal injury claim. For example, if the multiplier provides a value of $18,000 and the per diem provides a value of $30,000, you could choose a rough pain and suffering amount of $24,000.
Once you and your attorney devise a number that you think works for you, then you can write a demand letter to the insurance company.