how do insurance companies calculate pain and suffering from accidents

How Do Insurance Companies Calculate Pain and Suffering?

Accidents may cause many types of damages to those involved. Damages like lost wages and medical bills seem fairly straightforward. However, damages due to pain and suffering are not as straightforward – after all, how do you assign a value to your overall sense of well-being or the extent to which one particular incident affected it?

Fortunately, insurance companies perform calculations related to pain and suffering for you. The specific formulas can still seem mysterious, however, and often seem insufficient means for explaining such an elusive concept. Consider this quick guide to pain and suffering so you know what to expect when dealing with your insurance company after an accident like a car crash.

What is Pain and Suffering?

First, it is important to provide an accurate description of pain and suffering. After all, most of the damages related to your accident likely provided some sort of physical or emotional pain. What constitutes pain and suffering and what does not?

Pain and suffering refers to the concept that an accident causes victims a loss in the overall happiness, healthiness, comfort, and well-being most people enjoy in their daily lives.

Physical pain, emotional distress, mental disturbances such as PTSD, and general feelings of anxiety, depression, worry, insomnia, and lack of enjoyment in life activities that once brought you joy can all be examples of pain and suffering. In fact, there is no real limit to the factors that can constitute pain and suffering.

How Do You Record Pain and Suffering?

After your accident, your attorney likely advised you to retain all medical and property damage records. The intent is to provide access to official documentation showing that you experienced injury and damages. How do you keep a record of pain and suffering, and how can you prove it exists?

Only you can accurately report your daily levels of physical and emotional pain and suffering. Start by maintaining a daily log of your symptoms, both physical and emotional. If you experience pain in an incision, make note of it. If you feel anxious, depressed, or unhappy, make a note as well. Note each instance of pain and how long it lasted over a few months following your accident to provide a complete picture of your pain levels for the insurance company.

How Does the Insurance Company Calculate Damages?

South Carolina supports no one official method of calculating pain and suffering related damages. However, once you supply the insurance company with your documentation regarding your injuries, insurance companies and attorneys tend to quantify pain and suffering related damages in two main ways.

  • Per diem calculations. Per diem or per day, calculations make particularly good use of any documentation you provide. Per diem calculations involve the assignment of a particular dollar amount to each day you reported feeling pain and suffering. For instance, if your attorney quantifies your pain and suffering at about $125 per day, per diem calculations multiply $125 by the number of days you reported pain and suffering.
  • Multiplier calculations. First, the insurance company will determine the amount of your actual monetary damages, such as lost wages and medical bills. Then, the company will decide on a multiplier based on the severity of your injuries. Typically, the severity scale ranges from one to five, with one being the lowest. If your injuries rate a three, the insurance company multiplies your actual damages by three. For example, if you receive a TBI the insurance company considers a level three and your monetary damages are $4,000, the pain and suffering calculation is $12,000.

Insurance companies may use one of the above methods, alternate between the two, or choose to use their own unique method. In general, if you calculate your pain and suffering damages based on these two methods and choose a median point, any insurance settlement offered near your median point is fair. However, if you feel the insurance company’s calculation is unfair, you may want to hire a Greenville personal injury lawyer to help you negotiate a better settlement.