Understanding Non-Economic Damages and How To Calculate Their Value
Did you know your economic damages can even help you recover lost pay? What about non-economic damages like pain and suffering? Are you including these in your accident claim? If so, calculating pain and suffering in Arizona accident claims can leave you scratching your head in frustration.
After all, how do you calculate the value of something that doesn’t have a price? Thankfully, there are a couple of ways you can calculate your non-economic damages.
What Are Non-Economic Damages
As we mentioned earlier, non-economic damages are things like your pain and suffering. Non-economic damages are intangible and this can make them tough to calculate. Some other examples of non-economic damages include mental anguish, loss of life enjoyment, and loss of consortium.However, loss of consortium isn’t exactly a commonly listed damage in Arizona accident claims. Not everyone is comfortable admitting they are no longer able to be intimate with their partner. This can be a touchy and embarrassing subject.
Even though it can be embarrassing, omitting non-economic damage can reduce the overall value of your claim. This is something to consider, especially if your expenses are starting to pile up.
How Are Pain and Suffering Calculated
Figuring out the value of your economic damages like medical expenses is pretty easy. Grab a calculator, your bills, and receipts, and start adding everything up. Don’t forget about your property repair or replacement estimates. These are economic damages you don’t want to ignore.When it comes to calculating your non-economic damages, you can’t reference any bills or receipts. These types of losses are intangible but still have value. So, keep your calculator handy, you’re probably going to need it to figure out the value of your pain and suffering.
You have two options for calculating non-economic damages. You can use the multiplier or per diem method. Both are accepted by insurance companies, but the multiplier method is generally preferred. Your accident attorney may want to use both methods, so this way, if the insurance adjuster turns down the claim total using the per diem method, you’re ready with a counteroffer.
Using the Multiplier Method
The multiplier method is generally preferred by insurance companies simply because the value is usually lower compared to the per diem solution. You start by assigning a number between 1.5 and 5 to represent the degree of pain you experienced. The higher the number, the greater your pain.However, you and your attorney can’t pick a random number out of the air, which also means you can’t automatically assign your level of pain a 5 simply to increase your claim’s value.
How do you assign your level of pain a number? Your attorney and possibly the insurance adjuster usually consider the following factors:
The type and severity of your injuries. A fracture will receive a higher number compared to a minor contusion.
- Are your injuries preventing you from returning to work?
- Will you require ongoing medical treatment like rehabilitation therapy or a lifetime of care?
- What is the timeline for your recovery?
You should also consider how your injuries may impact your relationships with others. Will you be able to fully participate in their lives or are your injuries preventing you from fully enjoying life?
Generally, to assign a higher number like a four or five to your pain and suffering, your injuries are usually considered traumatic like disfigurement or paralysis. A traumatic brain injury (TBI) can also be considered a catastrophic injury.
Okay, so you’ve assigned a number to your pain and suffering. Now, you need the total of your economic damages. Multiply this total by the number assigned to your pain and suffering; this figure represents the value of your non-economic damages.
Once again, insurance companies always prefer paying out lower claim values. Trying to reach a settlement using the per diem method may leave your claim stuck in negotiations.
So, using the per diem method you count the number of days you experienced pain and suffering. You take this number and multiply it by your average daily pay rate. The total represents the value of your non-economic damages.
Your formula will look like this you experienced pain for 15 days and your average daily salary is $1,000. 15 (number of days you experience pain) x $1,000 (average daily pay) = $15,000. This is the total of your non-economic damages.
If you feel like you’re not being adequately compensated for your pain and suffering, you’re not out of legal options. You can file a lawsuit against the at-fault driver, which is a lawsuit against the driver and not the insurance company. However, receiving compensation isn’t guaranteed even if your lawsuit is successful. If the defendant doesn’t have the available funds, they can’t pay your award.
With their expertise, you can be confident in securing fair compensation for the emotional and physical hardships you've endured.
- Will you require ongoing medical treatment like rehabilitation therapy or a lifetime of care?
- What is the timeline for your recovery?
You should also consider how your injuries may impact your relationships with others. Will you be able to fully participate in their lives or are your injuries preventing you from fully enjoying life?
Generally, to assign a higher number like a four or five to your pain and suffering, your injuries are usually considered traumatic like disfigurement or paralysis. A traumatic brain injury (TBI) can also be considered a catastrophic injury.
Okay, so you’ve assigned a number to your pain and suffering. Now, you need the total of your economic damages. Multiply this total by the number assigned to your pain and suffering; this figure represents the value of your non-economic damages.
Using the Per Diem Method
The per diem method doesn’t take the entire value of your economic damages, instead, it looks at your average daily wage. If you’re only bringing in the average minimum daily pay rate, the insurance company may not mind settling a claim using the per diem method. However, if your salary is up there on the top tier, you may be better off using the multiplier method.Once again, insurance companies always prefer paying out lower claim values. Trying to reach a settlement using the per diem method may leave your claim stuck in negotiations.
So, using the per diem method you count the number of days you experienced pain and suffering. You take this number and multiply it by your average daily pay rate. The total represents the value of your non-economic damages.
Your formula will look like this you experienced pain for 15 days and your average daily salary is $1,000. 15 (number of days you experience pain) x $1,000 (average daily pay) = $15,000. This is the total of your non-economic damages.
Does Arizona Cap Pain and Suffering Damages
Arizona doesn’t have a cap on damage amounts you can be awarded for pain and suffering. However, this doesn’t always apply to insurance companies. Some policies have built-in caps and this means your compensation amounts are limited. You can receive more than the policy’s cap.If you feel like you’re not being adequately compensated for your pain and suffering, you’re not out of legal options. You can file a lawsuit against the at-fault driver, which is a lawsuit against the driver and not the insurance company. However, receiving compensation isn’t guaranteed even if your lawsuit is successful. If the defendant doesn’t have the available funds, they can’t pay your award.
Learn More About Calculating Your Pain and Suffering
If you’re ready to start calculating your pain and suffering, partnering with an accident attorney is a smart choice. Your attorney can guide you through the complexities of the process, ensuring that all factors are considered to accurately assess your non-economic damages.With their expertise, you can be confident in securing fair compensation for the emotional and physical hardships you've endured.
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Posted - 09/18/2024
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