To avoid the time and money of taking a claim to court, attorneys on both plaintiff and defendant sides will typically try to reach an agreement. The agreement will outline a determined amount for the defendant or their insurance to pay the plaintiff of the personal injury claim. How long it takes to receive your settlement money depends on a few different variables, one being how quick your team and the defendant’s teams are able to reach an agreeable settlement amount. Though your attorney will help figure out what your personal injury claim is worth, you can get an idea by doing two different calculations. Read on to learn two ways to calculate your personal injury settlement.
The Different Types of Damages
With each personal injury case, legal entities consider two different types of damages. You and your attorney will assess both types of damages related to your claim to determine what a fair settlement would be.
- Economic or “special” damages: Special damages are your out-of-pocket expenses that you can most often actualize with receipts and documentation. Medical bills, auto repair costs, and lost wages are a few examples of special damages.
- Non-economic or “general” damages: General damages are more difficult to put a number on, as they refer to issues incurred from the accident like physical pain and discomfort, emotional distress, and stress.
The Multiplier Method
The multiplier method requires you to add up your special damages and multiply the total by 1.5 for a low-end settlement number and by four or five for a high-end number. Which number you multiply your specials total by, or the multiplier, will depend on factors such as seriousness of injuries, impact on daily life, and whether there’s clear liability in the case. Insurance companies commonly employ the multiplier method when negotiating settlements.
The “Per Diem” Method
The second of the two ways to calculate your personal injury settlement is the per diem method. The per diem method requires you to use a daily rate to determine a certain dollar amount for your pain and suffering from the accident.
Finding a Daily Rate: Figuring out which daily rate to use when calculating with the per diem method can be confusing. As a good rule of thumb, use your daily earnings as a daily rate. Insurance companies usually find calculations using daily earnings more reasonable.
FAQ
How do you calculate personal injury claims?
The multiplier method requires you to add up your special damages and multiply the total by 1.5 for a low-end settlement number and by four or five for a high-end number. Which number you multiply your specials total by, or the multiplier, will depend on factors such as seriousness of injuries, impact on daily life, and whether there’s clear liability in the case.
