Every insurance company calculates personal injury settlements differently, but the pain and suffering component is normally determined by the total amount of your medical bills.
Variables including the severity of the car accident and the specifics of your auto insurance coverage dictate how much compensation you will receive for the pain and suffering the accident causes you.
As a benchmark, pain and suffering payouts tend to fall somewhere between $14,000 and $28,000.
This guide will outline how insurers establish a settlement value for pain and suffering and will give you an idea of what to expect in terms of compensation.
Calculating Pain and Suffering
Calculating your medical bills is simple. Take all the bills you get from the clinic, doctor, pharmacist, and hospital.
How, though, do insurance companies calculate the pain and suffering component of your claim as this is not so easily quantifiable?
Well, there is no fixed formula for determining the value of compensation for pain and suffering.
You will not be legally entitled to compensation for your pain and suffering if you were not injured in the accident.
Even if you do not feel you have sustained injuries, it is worth scheduling an appointment with a doctor as soon as possible after the accident. Some common car accident injuries – whiplash, for example – do not always become immediately apparent. Waiting too long before receiving medical care can compromise your claim.
[LEARN MORE]: How Do I Prove My Pain and Suffering After A Car Accident?
What is the Daily Rate Method Used by Some Insurance Companies?
Car insurance companies and personal accident injury attorneys use different formulae and multipliers when calculating compensation.
Sometimes, a daily rate or per diem method is applied.
According to the daily rate system, you receive a fixed amount of cash each day or each week that you suffer from accident-related injuries.
As an example, an individual required to take daily pain medication to alleviate accident injuries might be eligible for up to $200 per day in compensation, for as long as the medication is required.
Ask your attorney to clarify the system used to calculate damages.
What are the Consequences of Exceeding Maximum Liability Coverage Limits?
In some cases, you may find you encounter problems with policy limits. Some drivers only have minimum liability insurance, typically providing coverage for up to $20,000 of damages. If you are involved in an accident where damages come to $35,000, the other party’s insurer will only cover the first $20,000 of damages. To recover the other $15,000, you need to sue the other party.
When this kind of situation occurs, you may also be able to claim compensation from your insurer. To qualify, you will need underinsured or uninsured motorist coverage on your policy.
Average settlement amount for pain and suffering?
With most car accident settlements involving injuries averaging between $14,000 and $28,000, $21,000 is often quoted as an average settlement.
To arrive at a reasonable estimate of your accident settlement, total all your expenses then multiply the amount by three. This means adding up the following:
- Medical bills
- Lost wages
- Car repairs or replacement
Retaining an experienced attorney can help you to maximize your potential settlement value.
The rule of multiplying by three applies to the pain and suffering you experience after the auto accident. The compensation you receive is designed to cover emotional damages in addition to your current and future medical costs and rehabilitation expenses. An attorney can help you determine future costs more precisely.
Severe or permanent injuries lead to a more substantial settlement, whereas minor injuries result in lower settlements.
Settlements are higher if the other driver breached their duty of care by driving under the influence, or if they deliberately crashed their vehicle.
As an example, if you paid $15,000 in medical bills, $5,000 for car repairs, and you lost $2,500 in income after missing five days of work, your total accident-related losses are $22,5500. Using the settlement rule above and a multiplier of three, you could get as much as $67,500 from your settlement.
To reiterate, all cases are unique, and the average settlement value quoted above may not apply to your case.
Remember: The Insurer Wants to Pay You the Least Amount Legally Allowed
If you are involved in a car accident and you sustain injuries, the good news is that you are legally entitled to compensation for damages, including pain and suffering. The bad news is that you are likely to be dealing with an insurance company, a for-profit organization. The insurance company has only one goal: to pay you as little as legally possible for your injuries and damages.
Many insurance companies press hard for a quick settlement, hoping to capitalize on a lowball initial settlement offer. If you receive an early settlement offer that would settle your medical expenses with some left over, it can be tempting to take the check. Remember, though, the insurance company is not making this offer so you get your compensation quicker. Rather, they are hoping that paying you today will save additional future expenses.
Think carefully before accepting an initial settlement offer if you sustain serious injuries in a car accident. The full extent of these injuries may not become evident for weeks or months after the wreck. You could develop long-term neck or back damage, for instance. Alternatively, you could suffer ongoing pain and suffering or emotional damage after a severe and traumatic accident.
Pain and suffering is not an exact measurement, and there is significant variation from case to case. If you believe you are owed compensation for pain and suffering caused by a car accident, you should strongly consider retaining a personal accident injury lawyer.