How are Personal Injury Settlements Calculated?Request Free Consultation
If you or somebody you love has been injured in an accident caused by the careless or negligent actions of another individual, business, or entity in Colorado, you should be able to recover compensation for your losses. In general, most injury victims are able to recover compensation for their medical bills, lost income, property damage expenses, pain and suffering damages, and more through an insurance settlement or through a lawsuit against an at-fault party. However, if you are in the beginning stages of a personal injury case, you may be confused about how personal injury settlements are calculated. This is important, particularly if you need money to pay for your ongoing expenses caused by the injury.
Calculating Economic Damages
Economic damages constitute the compensation recoverable by the injury victim for losses that are relatively easy to determine. For example, there are bills and receipts that can be gathered and added up to properly calculate economic damages for the following:
- Medical bills
- Property damage expenses
- Lost wages
- General household out-of-pocket expenses
- The cost to modify vehicles or homes
- Prescription medications or medical devices
An attorney and an injury victim will gather up all of the bills and receipts necessary to reach a total for economic damages.
Calculating Non-Economic Damages
Calculating non-economic damages is going to be more challenging because this compensation is meant to cover more immeasurable losses that a person sustains after an injury. For example, there are no direct bills or receipts that can typically be gathered and added up to prove the following types of losses:
- Physical pain and suffering
- Emotional and psychological distress
- Loss of quality of life
- Loss of consortium for a spouse
In order to properly calculate non-economic damages after an injury occurs, an attorney will typically use one of two methods – either a “multiplier method” or a “per diem method.”
When using a multiplier method, an attorney will add up all the economic expenses and then multiply that total by a set number (typically a number ranging from 1.5 to 5). For example, if a person sustains $100,000 worth of economic damages, an attorney could use a multiplier of three to reach a non-economic damage total of $300,000.
If a per diem method is used, a specific dollar value will be assigned to each day that a person is expected to experience various types of pain and suffering after an injury occurs. For example, if a dollar value of $200 is assigned to every day of pain and suffering, and it is determined that the individual will experience an entire year of pain and suffering, then this would mean $200 multiplied by 365 days to reach $73,000 for non-economic damages.
Working With an Attorney
It is crucial to work with a skilled personal injury attorney in Denver who has extensive experience helping injury victims handle their claims with insurance carriers. An attorney will be able to work with trusted medical and economic experts who can fully evaluate the injury victim and properly calculate total expected losses.