When you file a personal injury claim, you’re asking for money (compensation) to make up for the damage caused by the other person’s mistake. Lawyers call these damages.

In an average personal injury settlement case, the damages involved include lost wages, medical expenses, pain and suffering, etc. However, as no 2 cases are exactly the same, the settlement amount can also vary.

What Goes Into a Personal Injury Settlement

There are two major types of PI settlements:

• Economic damages, which cover all the easy-to-count stuff such as hospital bills, surgery, meds, physical therapy, money you lost from missing work, or even broken car or property repair costs
• Non-economic damages cover the intangible, easy-to-count, like pain, being depressed or anxious after the accident, your scars, disability, or not being able to enjoy life the same way.

Sometimes there are punitive damages, too, but those are rare. That’s just when the other person was super reckless, and the court wants to punish them.

How Lawyers Figure Out the Numbers

Here are some of the ways the lawyers come up with a figure:

Adding Up Medical Bills

The first step is adding every cost you paid because of the accident: hospital visits, therapy, prescriptions, and gas for doctor trips. If you have receipts, those go in.

Calculating Lost Wages

If you couldn’t work, you add up the paycheck money you missed. If your injury means you can’t go back to your job in the same way, that gets added to it.

Pain and Suffering Formula

This part is tricky. As pain and suffering do not have a specific number attached to them like lost wages and medical expenses, quantifying them is difficult. The law has established 2 methods that can be used to help quantify and calculate damages for the same.

The Multiplier Method

 Most lawyers and insurance companies use what’s called a multiplier method. Here’s how:

• They take your medical bills.
• Then they pick a number between 1.5 and 5 (the multiplier).
• If your injury is really bad, they use a bigger number.
• They multiply it together, and that’s your “pain and suffering” money.

Example:

• Bills = $20,000
• Multiplier = 3
• Pain & suffering = $60,000
• Total = $20,000 + $60,000 = $80,000

That’s the ballpark.

Per Diem Method (Daily Rate)

Sometimes, instead of multiplying, they use a per-day rate. Like, “every day you’re in pain is worth $200.” Then they multiply it by how long you’re expected to hurt.

Example:

• $200 × 100 days = $20,000

Factors That Influence Your Settlement Amount

The following factors can sway your settlement amount in either direction:

• Severity of your injury: If your bruises are less severe, you’ll likely walk away with a lesser payout than someone with massive injuries.
• How long recovery takes: How long your recovery process takes also determines how much you get. If you heal quickly, you’ll get less pay than if you take months to recover.
• Proof: The stronger your evidence, the bigger the payout.
• Your fault: If you’re partly at fault, your money gets cut by that percent. Example: $100,000 settlement, 10% fault = you only get $90,000.
• Insurance limits: If the at-fault driver only has $50,000 insurance coverage, you can’t collect more than that unless they have other assets.
• Presence of a Lawyer: Insurance companies usually offer way less than what your case is really worth. An experienced lawyer knows how to push back, use the right numbers, and make sure you don’t get tricked into a lowball settlement.

Key Takeaway

• A settlement pays you for accident costs, pain, and stress.
• It’s based on economic + non-economic damages.
• Common calculation = bills × multiplier (1.5 to 5).
• Lawyers are important to make sure you don’t get underpaid.