Using a Multiplier
One common method of estimating the unknown (pain and suffering damages) is to multiply the known -- the out-of-pocket expenses for medical bills and lost income -- times an arbitrary multiple. The out-of-pocket expenses are called "special damages" or "specials." In a case that does not involve serious or permanent injuries, and where fault is reasonably clear, accident settlement value is determined under this system by multiplying "specials" by somewhere between 1 1/2 and 4, depending on the circumstances of your case.
For example, if you received a neck injury in your car accident, incurred medical bills of $2,500 and missed a week of work, which cost you $1,000, your "specials" are $3,500. Depending on the other facts in the case, the accident settlement value of your claim is somewhere between $5,250 (1 1/2 times specials) and $14,000 (4 times specials).
How do you choose the multiplier? The multiplier that is used is a judgment that is made after considering all of the evidence in the case. These are some of the factors that affect the multiplier:
- Whether there are any aggravating circumstances in the accident, such as drunk driving or driving under the influence of drugs. If there are aggravating circumstances, use a higher multiplier.
- The seriousness of your injuries.
- How long your recovery took.
- Whether you recovered completely. If your will have permanent consequences, use a higher multiplier.
Finally, before deciding on the most reasonable multiplier to use to calculate your accident settlement value, take a common sense look at the case. If the out-of-pocket monetary expenses are particularly high compared to the injuries, use a lower multiple. An example is someone who is taken to an emergency room from the accident scene and receives a great deal of diagnostic treatment, and incurs large medical bills, only to ultimately have relatively minor injuries. In this case, the multiplier should be lower. On the other hand, if the out-of-pocket expenses are low compared to the injuries, use a higher multiple.
The "Per Diem" Method
Another way to determine accident settlement value is to value your pain and suffering by giving it a "per diem" (per day) value and adding that value to your "special damages." Let's use the same example. You had medical out-of-pocket expenses of $2,500 and lost income of $1,000, or total specials of $3,500. Assume further that you received treatment for a neck injury for three months and that, even after you completed your treatment, you continued to have pain and stiffness in your neck for another two months. After that, you were fine. Using the per diem method for calculating accident settlement value, you assign an amount to each day (or week or month) that you suffered from your injuries.
One way of using the per diem approach is to use your actual income figures as a measure of damages for the time you were in active treatment, reasoning that dealing with your injury was at least as difficult as the job that you normally do. This gives you a reasonable answer to the question "how did you get that figure for pain and suffering?" And, it’s a method of valuation that you can use if your case goes to court. In court, the multiplier approach and Colossus are not formally recognized. You can't stand in front of a judge or jury and tell them you want three times your special damages. At least judges and juries are not supposed to calculate damages that way. Instead, they are supposed to award the amount that they decide is reasonable, fair and adequate for each component of damages -- medical bills, lost income and pain and suffering. Therefore, you can use this system to explain to a judge or jury what you claim and why you claim it.
Putting It All Together
The best advice may be to evaluate your claim both ways -- multiple of specials and per diem -- then apply common sense and determine what, under your particular facts, is a reasonable number for your pain and suffering claim.
Learn more about Car Accident Settlement Value.
State laws vary widely when it comes to car accident settlements and claims, and each claim has limitations and exclusions. In addition, recovery may depend on the particular insurance policies involved as well as judicial decisions in that state. If you get into even a minor car accident, you should contact a car accident lawyer so that you learn your rights.
Updated by: David Goguen, J.D.