How to Calculate Compensation After an Accident

How to Calculate Compensation After an Accident

• December 28, 2024
• Categories: Personal Injury Vehicle Accidents

It’s common knowledge that in personal injury and auto accidents, the defendant often makes a claim for pain and suffering. But exactly what constitutes pain and suffering? Auto accident lawyers are well-versed in navigating these claims and can help individuals understand and pursue compensation for their pain and suffering. But how exactly is a figure reached that’s considered fair compensation? And now that self-driving cars have entered the equation, how exactly will that affect the overall question of liability and the calculations used?

The Basics of Compensation

When you suffer losses in a car accident, the financial compensation you may be owed is referred to as “damages” in a legal context. Broadly speaking, there are two kinds of damages:

• Economic Damages or Special Damages: Quantifiable losses like medical costs and lost wages
• Non-Economic Damages or General Damages: Non-quantifiable losses like pain and suffering.

Adding up your economic damages is straightforward enough. But how do you calculate non-economic damages?

Calculating Non-Economic Damages

There’s More Than One Way to Value a Case

Many people use the phrase “pain and suffering” when describing non-economic damages. “Pain and suffering” is the stress, including physical pain and emotional and psychological trauma, that an individual experiences after an injury or accident. There are no set equations for calculating pain and suffering, but there are specific methods used by car insurance companies, including the multiplier method and per diem method.

The Multiplier Method

The multiplier method multiplies the total medical bills by a factor representing the severity of the injury, ranging from 1 for minor injuries to 5 for major ones. So, for example, if hypothetically your medical bills are $10,000, and your injuries are severe, the compensation for pain and suffering would be $10,000 multiplied by 5, for a total of $50,000.

Have you been hurt in a car accident you didn’t cause? If so, please call our office at 888-407-2955 to set up a free consultation.

The Per Diem Method

The per diem method is based on daily suffering. In this method, a number is calculated based on the injury and daily activities that can’t be performed because of the injury, multiplied by the total number of days those activities can’t be performed. So, hypothetically, if a knee injury is calculated to value $10,000 a day in daily activities lost and the injury persists for five days, the equation would again be $10,000 multiplied by 5, for a total of $50,000.

It is important to note that before any settlement can be reached, documentation must be provided to prove the severity of the injury, including:

• Medical reports
• Prescription receipts
• Over-the-counter medication receipts
• Medical bills, if applicable, for therapy, ambulance costs, X-rays, emergency room visits, and more
• Proof of lost wages or time off from school
• A log of all medical treatment, pain, and missed activities
• Photos of your injuries.

In relation to car injuries suffered as the result of auto accidents, though, the equations may need to change. Previously, auto insurance companies had a commonly used set of metrics, but this may need to change — if driver-optional vehicles become commonplace, the rate will focus less on the driver and more on the vehicle.

Will Self-Driving Cars Change the Way We Calculate Compensation?

Self-driving cars may soon be on the roads with us. Autonomous car makers tout the safety evident in road tests already taken. NBC San Diego points out that supporters believe regulations may be too heavy and self-driving cars have regulations regular vehicles don’t; companies that make the cars say they may be safer because the machinery “won’t drive distracted, drunk or drowsy.” If accidents do occur, consulting a distracted driving accident lawyer can help navigate the legal complexities. Waymo, one of the companies making the cars, said that in 424,331 miles their cars had driven themselves, a human driver intervened only 11 times to avoid collisions.

As to insurance, The Insurance Journal said the industry may have to come up with a new set of metrics to determine costs, as driverless cars won’t take into account the driver’s information. For example, the journal article points out that, initially, costs for a middle-aged man driving a sports car would be lower than for a teenager driving the same car. However, if the car drives itself, that equation may not work. The attitude of the manufacturers, according to the journal, may affect the insurance. Tesla, for example, contends that autopilot is essentially an assist feature, which in turn means rates would still be affected by the driver. However, other manufacturers, including Google engineers, have said it would be unsafe to expect the driver to take over during critical moments.

While it appears, based on the information available, that insurance will still be necessary and available for driverless cars, questions still remain; it may be that insurance will still carry the liability burden in the case of accidents. However, until the cars hit the streets, we won’t know.

How Much Is Your Case Worth?

Let Us Help You Value Your Claim

As you’ve seen, assessing what you may be owed in damages is not an exact science. At Neale & Fhima APC, we handle car accident cases on a daily basis. Because of that experience, we’re able to assess cases and give you an accurate idea of what your case may be worth.

If you have experienced an injury that you feel has caused you pain and suffering, you should contact an experienced personal injury law firm to assist in your case.

Neale & Fhima APC has helped thousands of clients secure millions of dollars in compensation. If you need help or have questions about your legal rights in California, give us a call today at 888-407-2955 or fill out our online form.