How to Calculate Compensation After An Accident

Categories: 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, and 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?

First, the Department of Motor Vehicles has an excellent page devoted to pain and suffering. As they explain, pain and suffering is SEPARATE from claims for medical expenses, including X-rays and medications, and also separate from claims for lost wages.

The definition they use of pain and suffering is the stress, including physical pain and emotional and psychological trauma, and individual experiences after an injury or accident.  As the DMV points out, 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 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.  

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, insurance companies had a common set of metrics to determine auto insurance, but this may need to change as the rate, if driver-optional vehicles become commonplace, will focus less on the driver and more on the vehicle.

NBC San Diego reports that autonomous cars may be customer-ready as soon as early 2018.  The makers tout the safety evident in road tests already taken. NBC points out that supporters believe regulations may be too heavy and have regulations regular vehicles don’t, while companies that make the cars say they may be safer because the machinery “won’t drive distracted, drunk or drowsy.” 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.

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 have 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 or fill out our online form.