Calculating Damages in a Personal Injury Case

The goal of personal injury lawsuits is to hold people responsible for their carelessness when it injures someone else. A key part of holding people responsible is ensuring they compensate the injured party for the harm that they had suffered. This compensation is known as damages.

Calculating damages in a personal injury case is one of the most important parts of a claim.

The point in calculating damages in a personal injury case is to fully compensate the victim for all of the harm they suffered. In a perfect world, the victim would be totally indifferent to the fact that they were injured at all. Courts often describe this as “making an injured victim whole again.”

Of course, this isn’t a perfect world. Perfect compensation — down to the penny — does not happen and isn’t realistically possible. Nevertheless, the law may hold the defendant responsible for a wide array of different damages.

The Types of Damages in Personal Injury Cases

Because there are so many factors contributing to a judge’s decision — and because sometimes parties settle out of court — it is tough to predict what kind of damages you’ll receive if you win a lawsuit.

However, there are common themes that run through many personal injury cases. Some things will almost certainly affect the amount of money you receive in damages.

Before we talk about what affects the potential damages you’ll recover, it is important that you understand there are two types of damages, as mentioned earlier in this article: compensatory and punitive.

Compensatory damages intended for you — the victim — to replace money you lost by not being able to work or paying hospital bills. Compensatory damages in a personal injury case are because of pain and suffering, emotional distress and other reasons.

Punitive damages are given to the injured party, but their purpose is different — they’re intended to punish the guilty party for contributing to your injury.

3 Key Factors that Determine How Much You’ll Receive in Damages

There are three key factors contributing to the monetary amount of damages of each type.

  • Which party is at fault
  • Personal responsibility with own injuries
  • Ability of defendant to pay the damages

1. Who Is At Fault?

It is important to determine who is at fault for your injury. Sometimes a jury will find that you’re partially responsible. If that’s the case, you’ll likely end up receiving less in damages. On the other hand, you may be completely innocent and the jury cannot find any fault with your actions. If you were absolved of any fault, the person or business responsible for your injury will likely have to compensate you in full.

2. How Responsible Were You with Your Injury?

If you wait to seek medical treatment until your condition becomes worse, you may not entitled to receive as much in damages as if you otherwise had sought treatment immediately. Let’s say you had a neck injury that could’ve been treated immediately. But if you waited until your back also began to hurt, causing back problems that could have been prevented by treatment of the neck injury.

3. How Capable is the Defendant of Paying?

In some cases, the defendant is completely unable to pay. For example, let’s say the at fault drive is without auto insurance and you do not carry uninsured motorist coverage. If at fault driver does not carry coverage, he personally may not be able to pay for expenses related to your medical care. While this is unfortunate, it does happen sometimes. You are best off attending the hearing for traffic violation and addressing your concerns to the Judge.  It is important to talk to your attorney about who’s really responsible for your injury, and to find out whether you have a case.

The First Step: Who Is At Fault?

It is important to determine who is at fault for your injury. Sometimes an adjuster will find that you’re partially responsible. If that’s the case, you’ll likely end up receiving less in damages. On the other hand, you may be completely innocent and the adjuster will insist on your partial responsibility. It is important capture all witness statements, 911 calls, and your recollection of the event to ensure you are not found improperly responsible. If you were absolved of any fault, the person or business responsible for your injury will likely have to compensate you in full.

Determining Fault – Collecting the Facts.

The first step should be collecting the police report. The officers in the city of Phoenix, Mesa, Gilbert, Tempe, Chandler and Scottsdale have 7 – 10 business days to turn in their report and have it become a public record. With that report may be pictures, witness statements, the diagram of the accident, measurements and the narrative the officer will rely on in the event the traffic ticket goes to court. Other steps are your actual injuries. Did you suffer a bruise or abrasion across your torso because of your shoulder harness, did you suffer tears or torn ligaments due to blunt force? Finally, interviewing the witnesses can prove helpful in proving your innocence in making a claim for compensation.

Finding Out the Other Side’s Version of the Accident.

Contacting the at fault driver’s insurance company and finding out if they are disputing liability and what their driver’s version of the accident is key to determining what needs to be done to prove your case. Taking careful notes, requesting to hear their driver’s recorded statements and requesting what pictures and documentation that support their version of the accident is crucial to know what steps to take in your claim.

The Second Step: Determining the Value of Your Personal Injury Case

No lawyer can tell you exactly how much your personal injury case is “worth.” There is no precise formula. But an experienced personal injury attorney can give you an estimated range of compensation you might expect.

Most personal injury cases settle out of court. Most defendants are covered by insurance. Therefore, in most cases, insurance companies negotiate a settlement. Compensation is paid to personal injury victims on the basis of these settlements.

In a settlement negotiation, the parties balance risk and reward.

One of the risks is that either party refuses to settle and the case goes to trial. The problem with  a case going to trial is it would take months or even years for the victim to receive compensation. The victim would also have to answer questions from the defendant’s attorney, undergo medical examinations and testify at trial.

If a case does go to trial, there is always the possibility that the jury will award an amount lower than the defendant, or the insurance company, would have agreed to. A jury may even find that the victim was entirely responsible for the accident and not award any damages.

Valuation of Car Accident Injuries

An insurance company can, and will, assign a dollar amount to each car accident injury.

While car accident victims undergo treatment for their injuries and their loved ones are still grieving, the insurance company of the driver who caused the car accident will be making calculations. The first inquiry they will undertake is liability.

Even in clear cases where their client is liable, or completely at fault, there are ways victims could be footing the bill for more than their fair share of the damages.

Following an accident in which there is bodily injury, an insurance company will typically assign a claims adjuster to evaluate the damage. A claims adjuster’s evaluation will be very different — and impersonal — than that of the injured person’s family and friends. To an insurance company, a person is the sum of their parts — and injuries to those parts can carry with them differing valuations.

For example, a head injury may be “worth” significantly more than a broken leg. To evaluate how much an injury is worth, insurance adjusters will typically look at treatment received by the injured person and how much future medical care they may need.

Expenses Associated with a Personal Injury

Whether compensation is based on a negotiated settlement or a jury award, its calculation begins with your actual expenses associated with your injury:

  • All medical costs
  • Lost income
  • Property loss or damage

If you haven’t fully recovered at the time of your settlement or jury award, then your compensation will also be based on your future medical costs and lost income.

Calculating Lost Income in a Personal Injury Case

Computing lost future income can be tricky. It depends on the following:

  • The extent of your injuries and your prospects for a full recovery
  • Your work capabilities and limitations if unlikely to make a full recovery
  • Whether assistive devices can help you do your work (voice recognition software, etc)
  • Promotions, bonuses, stock, options, and other benefits and increases in compensation you could have expected over your working life

Future lost income can also be based on a comparison of the income you could have expected to receive if you had not been injured, versus the compensation you could not expect for the type of work you are able to do given your injuries.

Intangible and Punitive Damages in a Personal Injury Case

Compensation is also based on less tangible and concrete damages, past and future, including:

  • Pain and suffering during the accident and afterward
  • Emotional distress including fear, anxiety and loss of sleep
  • Loss of enjoyment of normal life activities such as walking and engaging in recreation
  • Loss of consortium, meaning damage to family relationships due to factors such as inability to engage in sexual relations

If a defendant’s behavior or neglect in causing the accident was considered particularly outrageous, the plaintiff may be awarded “punitive” damages. Punitive damages intend to punish the defendant and deter similar conduct in future.

The Third Step: Understand How Insurance Adjusters Calculate Damages

Before you negotiate your settlement with the insurance adjuster, you will want to arm yourself with an understanding of how insurance adjusters work. They won’t tell you how they calculate damages.

But we will. They usually use a mathematical formula that tallies up your economic losses, and uses a multiplier to calculate your non-economic damages such as pain and suffering.

We’ll explain how it works here:

Add Up Economic Losses

This is the simple part. Once you’ve tallied up your medical expenses, property damage, and lost income, simply add these up to get a dollar sum of your economic damages.

How to Determine Non-Economic Damages

Calculating non-economic damages is a bit trickier because a lot of this depends on the future medical expenses caused by continued pain and suffering.

It is difficult to figure exact dollar amounts in the present, so insurance adjusters use a multiplier on your present and future medical expenses.

This multiplier can be anywhere between 1.5 and 10. The more serious your injuries are, the higher the multiplier.

Final Settlement Estimate

Finally, you add your economic and non-economic losses to get a total sum of your damages. The final sum is your total settlement estimate.

A Real Life Example of Calculating Damages in a Personal Injury Case

In case the above was as clear as mud, let’s walk through a real example.

Let’s say you were in an accident that caused $10,000 in property damage and you received $15,000 in medical bills. You missed two weeks worth of work, resulting in lost income of $5,000.

While you can file a separate property damage claim, you can add up medical expenses and lost wages in your personal injury claim. This gets you to $20,000 in economic losses.

  • Medical expenses: $15,000
  • Lost income: $5,000
  • Total economic loss: $20,000

This is relatively straightforward.

However, you have this nagging pain in your back making it hard for you to sleep at night. Your doctor ran another round of tests and decided you need surgery and post-op physical therapy. To go through this treatment, you expect to miss one day of work each week over the next 10 weeks.

This throws a wrench in your damage calculations. There’s no way to know how long you will need treatment after your surgery, and how much more time you will miss work.

The reality is that non-economic damages are never paid at 100% because the fullest extent months and years into the future are not certain. In short, non-economic damages are mostly speculative and usually will not be paid in full. At best, they may offer you partial compensation for these damages.

If you want compensation for non-economic damages, you will need to provide evidence. Your surgery should be scheduled and you need documentation to back this up. You should also ask for time off work and get it approved in writing. Only then you can provide said evidence to get compensated for non-economic damages.

For simplicity’s sake, let’s say your surgery will cost $20,000. Insurance may offer you $5,000 for the surgery as “non-economic damages”. They won’t pay you the full amount for the surgery because it has not happened yet, and these medical bills have not been realized at time of settlement.

Finally, we add both economic damages and non-economic damages to arrive at a final settlement amount.

  • Economic losses: $20,000
  • Non-economic losses: $5,000
  • Total settlement amount: $25,000

This would be what you should get from your settlement in this real life example — as long as the other party was 100% at fault.

If the insurers deemed you 20% at fault, you would get 20% less, or $20,000. By assigning a mere 20% fault to you, the other insurer manages to save at least $5,000 in this example.

Another important point to consider is the final settlement amount could drastically change with the use of a different multiplier. The adjuster may be pressured to use a lower multiplier to save money for his company. Projecting future medical expenses can also be a point of controversy during settlement negotiations.

Even so, going into your settlement negotiations armed with this knowledge will never hurt you in the end.

Get The Full Settlement Amount You Deserve

Evidently, we know all the tricks adjusters use to save their insurance companies money — thus denying you the full settlement amount you are entitled to.

For best results, it is ideal you hire an attorney who works on a contingency basis. This means you won’t have to pay legal fees until and unless you are awarded damages. Additionally, make sure your lawyer is willing to give you a free consultation, which can save you both time and hassle.

If you have been in an accident and need to figure how much in damages you could be compensated for, contact the Thompson Law Firm to speak with an experienced personal injury attorney.


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