The traditional method used to calculate pain and suffering settlements is by applying a multiple to the actual costs or special damages incurred by the injured party. These must be supported by documentation and can include:
- property damage
- lost wages
- medical and therapy bills
- out-of-pocket expenses
- any other measurable amounts
However, the hidden costs in pain and suffering for those without documented earning power are general damages. For example, a stay-at-home parent who submits a personal injury claim for pain and suffering cannot claim lost wages even though the working parent must reduce work hours to care for children when the stay-at-home parent is unable to do so. It might also be difficult to claim added childcare expenses because they were not incurred as a result of personal injury to the working parent. Yet, there is obviously pain and suffering when anyone is injured as the result of the negligent or willful acts of another. So, how do attorneys and the insurance adjuster calculate the amount of compensation due to the victims of these acts? Calculating the actual costs may be straightforward; coming up with an actual cost that fairly represents the pain and suffering for a stay-at-home parent, is not. This is the process:
- Determine the duration — Is the pain and suffering limited or is it permanent? For example, statistics may indicate that a broken hip requires an average of three months recuperation from the time of the break to the time when the injured person can resume normal physical activity. It is limited in duration. However, a broken spine may cause paralysis and incapacitate the injured person for an unknown period of time—possibly a lifetime. Either way, the insurance adjuster must decide what amount is adequate compensation for actual costs incurred over the duration involved.
- Draft a settlement letter — The demand letter presents arguments designed to convince the insurance adjuster that the pain and suffering is real and deserves fair compensation beyond covering the amount for medical and related expenses associated with the injury.
- Apply a multiple — Applying a multiple to the substantiated or special damages in the claim multiplies them by one to five times, and possibly higher. The multiple provided by the claimant can be raised or lowered by the insurance adjuster based on how well the claim is presented and substantiated in comparison to similar claims settled by the company.
However, claims for permanent injuries and disabilities are not so common and often wind up in court. That is why it is important to have an experienced personal injury attorney to prepare the demand letter when compensation is sought for permanent or long-term injuries. Atlanta attorneys Bruce A. Hagen and his associates have over 30 years of experience helping victims of injuries receive adequate compensation. Contact the law firm of Hagen and Rosskopf, LLC if you need help making a personal injury claim.