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How Do Insurance Companies Determine Pain & Suffering?

In any accident, the liable party owes the injured party damages, or compensation for their injury. Compensation comes in two forms: economic and non-economic damages. Economic damages are the expenses that are easily documented, such as medical bills, lost income, or property damage. Non-economic damages are less easily documented, but just as important. These damages include reparation for your pain and suffering, diminished quality of life, and emotional distress. Because these damages are not objective, the way that insurance companies determine the value of them can vary.

An accident can leave victims with considerable physical injuries, as well as mental and emotional injuries. Injured individuals may develop depression, anxiety, PTSD, or other mental disorders, as well as experience high levels of stress, the inability to participate in their life as well as they are used to, and a reduced quality of life. These emotional damages can take a toll on an injured person, and the lifestyle changes they may be facing can further complicate their psychological recovery. Nearly every injury settlement will include some amount of non-economic damages.

How Are Pain and Suffering Calculated?

The experience of an accident and the subsequent recovery is unique to each victim, which makes assigning a dollar value to the pain and suffering experienced a difficult task. There are two ways in which insurance companies typically calculates the amount of non-economic damages to be paid.

The first method is to multiply the economic damages by a number between 1 and 5 to generate the amount of non-economic damages owed. The multiplier increases with the severity of the accident and the victim's injuries. The second method assigns a set amount per day, known as a per diem approach. Under this method, the insurance company will pay a set amount for each day the victim is expected to be in recovery from their injuries.

What is a Fair Amount?

Determining what a reasonable offer for non-economic damages can be a complicated decision. An experienced personal injury attorney should be able to advise if the offer is appropriate. Either of the above methods can be used to come up with an estimate, and compare the offer against the estimated amount. The severity and lasting effects of the injury should also be considered when determining what is a fair amount.

If you need help negotiating a personal injury settlement, you need the representation of our Austin personal injury lawyers. At Komie & Morrow, LLP, we are dedicated to fighting for the rights of our injured clients. With over 50 years of collective experience, our team has proven our ability to get results. Contact Komie & Morrow, LLP today for a free case evaluation.

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