How Is My Personal Injury Settlement Calculated?

If you have suffered an injury in an accident, whether it was a slip and fall, a car accident, or any other, and you have filed a claim against the party that is responsible for your injuries, your lawyer might already have explained to you that your personal injury settlement will include two types of damages.

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In legal terms, damages simply refer to the amount of money you expect the party at fault for your injuries to compensate you for. And the types of damages you can seek can be either economic or non-economic.

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How are economic damages determined?

Economic damages are easy to calculate because you just need to add all the losses that are directly attributable to the accident. These may include:

Medical Expenses

From the moment you are in the accident and either go to a doctor or are taken to an emergency room, you should keep a detailed file of all your expenses. These might be medical appointments, treatments, physical therapy, hospital stays, prescriptions, and more.

Lost Income

If your injuries have prevented you from returning to your job, you are suffering financially due to loss of income. Keep a file on the wages that you have not received, add prior pay stubs to help your lawyer come up with the precise number.

Property Damage

If you were injured in a car accident and your car was totaled or if you spent money getting it fixed, these expenses will also become part of your economic damages. Add to this any other out-of-pocket losses.

How are non-economic damages calculated?

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Calculating intangible items such as emotional distress or pain and suffering is much more complicated than simply adding some numbers as it happens with economic damages. Non-economic damages are much more difficult to quantify so it is common to use one of two different methods. This means either using a multiplier or a daily rate. Here is how they work:

Multiplier Method

This method involves taking the final number of your economic damages and multiplying it by a number that falls between 1.5 and 4 or 5. You would select the exact number depending on a number of factors which might include:

  • The severity of your injuries
  • The prospects for your complete recovery
  • The impact your injuries have had on your daily life
  • Whether the other party was clearly at fault for the accident or only partially

While insurance companies will likely use a lower number, your lawyer will argue for a higher one.

Daily Rate Method

This method, also called “per diem,” entails demanding a certain dollar amount for every day you have endured pain and suffering due to the accident. Attaching an amount to every day may be tricky. Your lawyer may choose to use your daily earnings, for example, and multiply this amount by a certain number of days that will be determined by data used by your lawyer.

To have a much more accurate calculation of pain and suffering, you should mention to your healthcare provider that you are in pain whenever you visit them for care if that is the case. Click here for more information on how the final calculation of a personal injury settlement amount should be calculated and what items are included in it.

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