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Insurance companies are known to use a personal injury calculator to decide how much cash you should get for your auto accident settlement.
The main thing you should know, is that the amount of your insurance claim is simply not the sum of your total damages. It is usually much higher.
Personal Injury Calculator Formula
Here is how the personal injury calculator determines the amount of money you get from your settlements.
Maximum $ = Pain Multiplier X Medical Expenses + Loss of Income
Let's look at each part of this settlements formula:
Medical Expenses
The medical expenses are sometimes referred to as "special" damages. These expenses include treatment for your car injuries, hospital visits, x-rays, lab fees, ambulance rides, medication etc.
Loss of Income
This is the amount of money you would have earned if you weren't injured. This includes missing time from work or a potential business opportunity like missing a job interview.
Pain and Suffering Multiplier
Adding up the financial costs of your personal injury settlement is the easy part. The insurance company also has to pay you for your pain and suffering, emotional stress, and inconvenience. These things are hard to put a dollar value on. So the insurance company decides to use a multiplier to see the range of your claims.
The typical range of the multiplier is between 1.5 and 5.
Example:
You were injured in a car accident and your medical expenses come out to $1,000. Your injuries caused you to miss 3 days of work which totaled to be $600.
Using the personal injury calculator your claim falls within
Claims Amount = [1.5 - 5 ] X $1,000 + $600
Claims Amount = $2,100 - $5,600
You can see that the bulk of your claim depends on which multiplier gets used. The higher your multiplier, the higher the your settlements.
The value of the multiplier used in the personal injury calculator, depends on how severe and painful are your car injuries.
If you only sprained your ankle, the multiplier will be on the lower side (1.5-3).
But if you broke your leg and were in a wheel chair, that is obviously a more serious injury. The multiplier for this will be on the higher scale (3-5).
The multiplier may even go higher (10) in more extreme cases like permanent disabilities or disfigurement.
How the Insurance Company uses the Personal Injury Calculator
The claims calculator gives you an estimate of how much your insurance claim might be worth. The actual amount of cash for your car accident claims, will depend on how much fault the insurance companies gives you for your accident.
For example, let's say using the injury calculator, you arrive at a range of $5,000 to $10,000 for your claim.
This is the amount of money you can potentially get. If the insurance company decides that the other driver was completely at fault for your accident, you would get the full amount of this range.
However, if after looking at evidence the insurance companies decides you were 20% at fault and the other driver 80% at fault, your claims range would shrink by 20%.
This means you would get between $4,000 - $8,000 (instead of $5,000 -$10,000) from your insurance settlements.
In other words, your actual personal injury settlement amount will be:
Your $= Personal Injury Calculator Value X % of other drivers Fault
Note: There is no formula to figure out what percentage of the blame you get. It is completely subjective and depends on how much evidence you have to show the insurance companies that you weren't at fault. That's why it's important you understand which mistakes to avoid when you start your insurance claims.
Bottom Line
The insurance company has to compensate you for your expenses and your pain and suffering. Because pain and suffering are subjective, the insurance companies rely on a multiplier range to figure out the amount of your settlements.
It's important to know that the personal injury calculator formula isn't the exact figure you will get from your settlement. This formula should be used to quickly see which range your car insurance settlement amount falls in. It is a ball park figure and an initial guess.
The personal injury calculator is also primarily used for less severe injuries. If you were badly injured (for example permanently disabled), then you should not rely on this formula. Your best option is to get a free consultation with a personal injury lawyer to see how much your damages could be worth.
The best use of the personal injury calculator, is to understand which things are important in your settlement claim. This way you can focus on these things in your demand letter and accident settlement negotiations.
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