How to Calculate Non-Economic Damages in a Personal Injury Claim


How to Calculate Non-Economic Damages in a Personal Injury Claim

If you get into an accident and the other party is at fault, then they should be held accountable for any non-economic damages you suffer. It’s not easy to calculate non-economic damages in personal injury claims, but a skilled and experienced attorney will know how to get you the settlement you deserve. What are non-economic damages? Well, they are the emotional and physical pain and suffering the victim had to endure. They can’t be calculated using financial data; however, your life can still be greatly impacted by this kind of trauma.

Some of the more common examples of non-economic damages include:

  • Chronic pain
  • Permanent disability
  • Anxiety and depression
  • Mental anguish
  • Post-traumatic stress disorder

And the list goes on and on.

How Do You Calculate These Damages?

When calculating non-economic damages in personal injury claims, insurance firms normally have their own formulas they use. Your lawyer will most likely take advantage of one of these two methods.

The Per-Diem Formula

The per-diem method assigns you a cash value based on what you make daily at your job. You get a daily rate for all the days that your hurt causes pain and suffering, not allowing you to be able to do your job properly. For instance, say that you suffered a broken arm because of a car accident. You won’t be able to go to work for the next 100 days or so because you need to recover from the crash. You get a $40,000 annual salary from where you work. You’ll have a $160 daily rate for clocking in 250 workdays. Because you’ll not be able to work for 100 days because of the injuries, your portion of pain and suffering will be around $16,000.

The Multiplier Method

The second way you can calculate non-economic damages is by using the multiplier technique. The insurance firm will assign a multiplier or number based on how serious the injuries are, normally between 1.5 and 5. The more severe the injuries, the higher your number will be. Next, the firm will multiply your economic damages’ total value by the number that was assigned to you to determine non-economic losses. For instance, let’s say you get an injury to your brain and get the number 4 as your multiplier. You may experience economic losses of up to $100,000. As a result, the pain and suffering you’re entitled to is a $400,000 award.

What’s the Importance of Non-Economic Damages?

In most cases, many economic damages will be directed straight towards handling concrete expenses and medical bills linked to the accident. Economic damages also offer plaintiffs a chance to get compensated based on their earning capacity. When the claimant is a stay-at-home mom, a senior, or a low-wage earner, they may not have the ability to get the requisite economic damages that’ll support them until they die. Economic damages don’t account for an injury’s full negative effect. Loss of enjoyment is one of the greatest losses a claimant can have. When all you can think about is recovering from the injuries, you lose a lot of pleasure and enjoyment. The pain and suffering that one endures from an injury can only be properly quantified via the non-economic damages route. In addition to all the physical pain a claimant has to endure because of a severe personal injury, there’s also some anxiety, shame, and mental anguish that comes along with it. This all has to be compensated in one way or another, and that’s why they typically fall into the category of non-economic damages. They’re an incredibly important part of any accident legal claim.