What are the ways courts calculate noneconomic damages?

On Behalf of | Jan 11, 2024 | Personal Injury |

According to the Kentucky Office of Highway Safety, over 2,600 people suffer serious injuries from motor vehicle crashes annually. After being in such an accident, it can be difficult to return to a normal life. Losses may include specific economic costs, like medical bills, lost wages and property repair, and even noneconomic factors, such as pain and suffering.

Naturally, a claimant wants to know how courts and insurers calculate noneconomic damages and do whatever is possible to get the largest settlement or award possible. Finding out the methodology behind these calculations can be a good starting point.

How courts and insurers use the per diem method

The per diem method is one way that courts and insurance companies calculate noneconomic damages following an accident. This method assumes that the accident survivor is experiencing daily pain and suffering from the day of the accident until the day they will likely recover.

To calculate the total damages, the court multiplies a daily rate by the number of days it expects the claimant to experience pain and suffering. However, this method is usually only ideal for injuries that have a set recovery time, such as a broken bone, which usually takes 12 weeks at most. For injuries where recovery time is uncertain or indefinite, this method may not be a good choice.

How courts and insurers apply the multiplier method

The multiplier method is another technique for calculating noneconomic damages in personal injury cases. In this method, a court establishes a base figure for damages by means of the severity of the sustained injuries. It then multiplies that base figure by a number between 1 and 5, depending on how severe the injuries were. The more serious the injuries, the higher the multiplier.

Previous judgments will inform the chosen number, and the court or insurer can adjust the multiplier upward or downward, depending on the specifics of the case. This method is more common in cases where recovery time is uncertain.

While money cannot fully erase the pain and suffering of a serious accident, it can help alleviate some of the economic and noneconomic burdens. Both the per diem and multiplier methods attempt to calculate noneconomic damages after an accident from as objective and fair a standpoint as possible.