Posted on October 31, 2018 in Personal Injury
An accident can turn your life on its head – you may face unexpected medical bills, lost wages from missing work, and an uphill battle to recovery. A personal injury claim can help address all of these consequences and more. One of the most common questions we hear is “What is my personal injury case worth?” The answer depends on a number of factors, but in general insurers and attorneys valuate claims based on common criteria. Knowing what to expect from the valuation will help you understand the process of receiving compensation for your injuries, pain, and suffering.
Common Types of Damages
Personal injury claims may provide compensation for three main types of damages:
- Economic damages compensate for the material losses associated with an accident.
- Common examples include medical bills, lost wages, loss in earning capacity, and the expected costs of ongoing rehabilitation. In the case of serious or permanently disabling injury, these claims may also project the loss of income, cost of required home accommodations (i.e., installing ramps), and more.
- General damages reimburse for the intangible losses you and your loved ones may suffer.
- Examples include physical pain, suffering, and loss in life quality. In the case of wrongful death, general damages may include emotional anguish, loss of consortium or partnership, and loss of guidance.
- In some cases, you may be able to file for punitive damages.
- These generally apply to cases of gross negligence or intentional or reckless misconduct. They serve to punish the defendant for wrongdoing and make an example of them to others. An example in which punitive damages may apply might be a medical malpractice case in which a physician accepts money from a pharmaceutical company to prescribe medication off-label.
Methods for Valuating Claims
Insurers have two main methods for valuing claims, specifically, calculating general damages. They calculate economic damages by asking for copies of medical bills, documentation about work pay, and more. Assigning a value to intangible loss, however, is more difficult. They use one of the following to determine an appropriate value for general damages.
- The multiplier method is the most common and involves choosing a number between 1.5 and 5 and multiplying it by the amount of economic damages you might incur. For example, if you incurred $100,000 in specific damages, your general damages will be somewhere between $150,000 and $500,000. The sticking point in negotiations is often the multiplier itself. More serious accidents tend to have a higher multiplier.
- The per diem method works by taking a number – usually the amount of money you make at work each day – and multiplying it by the number of days you suffered. For example, if you were the victim of an accident that left coping with injuries for six months and you make $200 a day at work, you can expect your general damages to be somewhere around $36,000. This is not as commonly used as the multiplier method.
Calculating punitive damages often has a looser framework, but they must be proportional to the amount of actual damages. Generally, punitive damage awards do not exceed four times the amount of compensatory damages.
No matter how insurers choose to evaluate your claim, having an attorney is essential. A personal injury attorney will negotiate aggressively on your behalf to attain a fair amount of general damages. In other words, with an attorney’s assistance, you have a better chance of receiving a claim amount that not only reflects your economic damages, but also the amount of pain, suffering, and loss of life quality you endured as a result. Evaluating your claim not only requires calculating your economic damages, but any general and punitive damages to which you may be entitled.