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How Do Insurance Companies Calculate Pain and Suffering?

Posted in Insurance law,Personal injury on November 29, 2019

As an injured person, you can claim two types of compensatory damages: economic and non-economic. Economic damages are specific losses you suffered in the accident, such as the exact value of medical bills and lost wages. Non-economic damages, or general damages, are harder to quantify. Non-economic damages refer to your pain and suffering, emotional distress, and missed life experiences and opportunities because of the injury.

You may need the assistance of a personal injury lawyer to prove pain and suffering damages, as well as to demand fair compensation from an insurance company for these losses.

Calculation Methods for Pain and Suffering

There are, in general, two main elements of pain and suffering damages: physical pain and emotional distress. The feelings you experienced because of your accident – pain, anxiety, depression, illness, sadness, humiliation, insomnia, nightmares, post-traumatic stress, etc. – are compensable losses in most insurance claims. How the insurance company calculates pain and suffering depends on the company’s protocols and the unique accident case. Most insurers, however, use one of two common formulas to calculate pain and suffering.

  1. Per diem method. The per diem method is most common with temporary injuries that have an estimated recovery date. An insurance company may take the claimant’s daily average working wage and multiply it by the number of days the victim will foreseeably have the injury to calculate per diem – ‘per day’ – pain and suffering damages.
  2. Multiplier method. An insurance company may use the multiplier method if the victim has a permanent or long-term injury. This method takes the total amount of economic damages awarded to the claimant and multiplies it by an appropriate multiplier. A minor injury might receive a multiplier of one, while a severe injury may be multiplied by four, five or more.

It is up to the insurance company how it wants to calculate your pain and suffering damages. It could use either, both or neither of these methods. The insurance company could deny your claim to pain and suffering damages outright or offer a random amount it believes is fair for your circumstances. No matter how the insurance provider calculates a pain and suffering award, you have the ability to negotiate for a fairer settlement amount before acceptance.

How to Maximize Pain and Suffering Damages

Once the insurance company calculates your pain and suffering damages, you will have the opportunity to stake a higher claim. You can hire an attorney to negotiate your insurance settlement on your behalf. A lawyer will know how to argue with insurance claims adjusters for the best possible case outcomes. Your attorney may be able to prove your right to greater pain and suffering damages through evidence such as expert testimony and statements from friends and family members.

If settlement negotiations are not enough to convince the insurance company to offer a greater award for serious pain and suffering, your lawyer could take your case to court in West Virginia. A personal injury trial against the defendant and his or her insurance company could end in a judgment award that forces the insurer to offer fair compensation. A personal injury verdict will generally award more compensation than an insurance settlement, especially for pain and suffering. It is a jury in a personal injury trial that determines a pain and suffering award for a victim.

Does West Virginia Have a Compensation Cap?

West Virginia currently does not have a damage cap, or a limit on the amount of compensation a victim can receive, for personal injury claims. No damage cap means your attorney could argue for as much compensation as he or she believes is reasonable to reimburse you for your losses. The total damages won in a case, therefore, could be substantial. A cap on non-economic damages does exist, however, on medical malpractice claims. No plaintiff may receive more than $500,000 in pain and suffering damages for a medical malpractice case.