How Do Insurance Companies Assign Dollar Value To Pain And Suffering?

An accident victim’s mental and emotional injuries become the source of the same victim’s pain and suffering. Insurance companies use a variety of methods, in order to determine the value of a claimant or plaintiff’s pain and suffering.

Multiplier method

The defendant’s insurance company should have no doubt about the value of the economic damages, the medical expenses and the lost income. Still, the value of the non-economic damages (pain and suffering) must be determined. At the same time, the insurance adjuster might have succeeded in gaining access to information about any claims of emotional or mental disturbances that could have come from the claimant/plaintiff.

That acquired information should aid the insurance adjuster in the selection of a figure called a multiplier. The multiplier would reflect the severity of the claimed injuries. Claimants/plaintiffs with severe injuries would have cases that qualified for a multiplier was closer to 5.

That multiplier, usually a figure between 1.5 and 5 would become one factor in a multiplication operation. The other factor in that same operation would be the sum of the medical expenses and the lost income.

Per Diem method

Personal Injury Lawyer in St. Catharines know that adjusters that elect to use this method must select an amount of money that must act as a rough estimate for the costs experienced by the claimant/plaintiff on a daily basis.Once that amount of money has been selected, the adjuster then examines the calendar.

The adjuster that had chosen to use the Per Diem method needs to calculate how many days have passed since the date of the accident and the date when the treating physician reported that the patient had achieved maximum medical improvement (MMI). The cost per day must be multiplied by the number of days that passed before the patient’s full recovery.

Computer program

The other 2 methods do not take into consideration the method of treatment used by the claimant/plaintiff. Utilization of a computer program, however, would allow an insurance adjuster to consider that specific element of the reported treatment. That fact underscores the reason that some adjusters prefer to use a computer program, when determining the value for the claimed pain and suffering.

Note that all 3 methods allow for calculation of a monetary figure. That figure gets used to represent the value for a claimant or plaintiff’s pain and suffering. The law does not mandate the utilization of any one specific method.

By the same token, personal injury lawyers have not expressed a feeling of disproval towards any method. Each of them ensures the insurer’s dependence on a fairer approach. Each of the methods has tackled a difficult and challenging task in a manner that seems fair to the affected claimant or plaintiff.

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