Pain and suffering is hard to quantify. That's why most insurers use either the multiplier or per diem method to calculate pain and suffering costs. The amount of money that could ultimately be compensated ranges from a few thousand dollars upwards into the millions.
Car accidents range from minor to extreme. Injuries exist everywhere on that spectrum. Here are some of the most common injuries you may have to contend with following an accident.
When looking at how much compensation a person should receive after a car accident, numerous factors come into play. Medical bills and the cost to replace the car are fairly easy to determine.
However, pain and suffering is more obtuse. It's harder to quantify because it accounts for physical, emotional, and mental distress.
For example, a severe injury may prevent a person from continuing his or her favorite hobby. There's no monetary value associated with the hobby, but the person's quality of life decreases.
Most insurers take into account your injuries, your medical bills, and lost wages when trying to come out with a pain and suffering amount.
A significant injury to the brain, neck, or back could affect a person for years. That's why most insurers use one of two approaches to figure out how much to award someone for the time being.
With the multiplier method, an insurer adds up all of the economic damages and applies a multiplier between 1.5 and 5. Where you fall on the scale depends on the severity of your injuries.
Your medical expenses and lost wages may total $10,000. You weren't injured too badly, so the insurer adds a multiplier of 1.5. Therefore, your payout would be $15,000.
However, if you were injured fairly severely, the insurer might multiply by a 5, bringing the payout to $50,000.
With the per diem method, the insurer looks at what you typically make in a day at your job. They then multiply it by how many days you suffered from pain related to the accident.
Take someone who makes $75,000 annually. The per diem rate would be $300 (assuming 250 work days a year). If that person suffered for 3 weeks and needed time off work the entire time, then the payout would be $6,300.
You may do some calculations and come up with a number you think is fair. The insurance company comes back with a different, lower number. This is fairly common, and there are reasons why it occurs.
Certain conditions necessitate greater treatment. You may not even be able to work again. Some medical conditions that result in an increase in compensation include:
Most auto insurance policies provide coverage for pain and suffering. This is usually labeled as "bodily injury liability." In addition to pain and suffering, this coverage also applies to lost wages and medical bills.
That's why it's critical to have a good insurance policy that protects you against anything. Whether you're out of work for a week or a year, you want to protect yourself and your family.
If you're not sure, consider comparing different insurance providers to your own to find out who's able to provide you with the level of protection you need. Don't get caught on unprepared in the life-altering car accident.
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