You may consider the value of your injury claim priceless but this isn’t how the insurance company views it. Insurance companies want proof for every damage and even then, this doesn’t always represent the claim’s true value. This can mean your settlement is less than you think your claim is worth.
The average settlement in a personal injury claim varies depending on several factors and each one can affect its overall value. Here’s a look at what goes into determining the value of an accident claim.
Economic Damages
What’s included in your personal injury claim may differ from someone else’s, and this is okay. No two accidents are exactly the same and this can affect the types of damages you can claim. With that being said, most accident claims include economic damages.
Economic damages are tangible losses and cover things like your medical expenses, property repairs, replacement, and lost current income. Your claim may also include lost future earnings, but only if your injuries are preventing you from returning to work.
If your accident doesn’t result in permanent or life-altering injuries, you may not be able to list lost future wages as economic damage. This is only an example of how personal injury claims can differ.
Figuring out the total of your economic damages is relatively easy. You’re going to need a calculator, along with all of your bills, receipts, and property repair/replacement estimates. Add the total of everything together and you have the value of your economic damages.
Don’t throw anything away after calculating the value. You need to submit the documentation to the insurance company with your claim.
Non-Economic Damages
Getting the value of your economic damage may seem like a breeze compared to calculating your non-economic losses. Since these losses are intangible, you can’t refer back to bills and receipts. No, you can’t guess the value. Don’t forget that insurance companies typically require proof of any listed damage and its value.
Before we get into how you can calculate something without an intrinsic value, it helps to know what non-economic damages are referring to. Some examples of non-economic damages can include:
- Pain and suffering
- Mental anguish
- Loss of life enjoyment
- Permanent disfigurement like scarring or an amputation
- Loss of consortium
You may also be able to list post-traumatic stress disorder as a non-economic damage. Accidents can be stressful both mentally and physically.
However, before you can claim damage like PTSD, you’re probably going to need to provide medical proof. This is usually done in the form of your medical records, along with testimony from a mental health expert.
Calculating Non-Economic Damages
Since non-economic losses don’t have handy price tags, you need to rely on other methods to calculate value. You and your personal injury attorney have two options and both methods are accepted by insurance providers.
The Per Diem Method
If you decide to use the per diem method, you start by counting the number of days you experienced pain and suffering from your injuries. The next step is to figure out your average annual salary rate. Now, determine your average daily salary.
Even if you’re an hourly employee, it’s still a good idea to look at your annual wages instead of only your daily take-home pay. Your annual salary may be a little higher than what you typically make in one day.
Take the number of days you experienced pain and multiply this by your average daily salary. The answer is the total value of your non-economic losses.
An example of a per diem formula can be:
40 (the number of days you experienced pain) x 240 (average daily pay) = $9,600 (value of your non-economic losses).
The Multiplier Method
Even though the per diem method is perfectly acceptable, most personal injury claims use the multiplier solution to calculate non-economic damages. Instead of figuring out your average daily pay, the multiplier method uses the total value of your economic damages.
You assign your pain a number between 1.5 and 5. The higher the number the greater your pain and suffering. Multiply your economic damages by the number you pick and you have the total of your non-economic damages.
Here’s a quick look at a formula example using the multiplier method:
$100,000 (value of your economic damages) x 4 (number representing your degree of pain) = $400,000 (value of your non-economic damages)
A quick tip is to use both methods. This way if the insurance company doesn’t agree with your claim’s value, you’re ready to present a counter offer. Sometimes, this can help speed up negotiations so you can receive your settlement check a little sooner.
Comparative Negligence Can Affect Your Claim’s Value
Some states like Florida follow comparative negligence rules and this can affect the value of your personal injury claim. Comparative negligence comes into play when more than one individual is responsible for causing an accident.
When this happens, each responsible party is assessed a percentage of the blame. You shouldn’t have an issue filing a personal injury claim as long as you’re not assigned more than 50% of the blame for the accident. How does this impact the value of your accident claim? Your claim’s value is reduced by your percentage of fault.
You may be wondering if you can contest your percentage of assigned fault, and the answer is usually yes. You should be able to file an appeal with your local civil court. You must file the appeal in the jurisdiction where the accident occurred. Sometimes, this may be a different jurisdiction than where you live.
A judge or jury will review all of the presented evidence and rule to either reduce your percentage of fault or keep it the same.
Ensuring You Receive Your Claim’s Maximum Value
Trying to calculate your damages after an accident can be challenging, even if you’re not dealing with comparative negligence. Partnering with an experienced personal injury attorney can help ensure you receive your claim’s maximum value.
