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How do courts and insurers calculate noneconomic damages?

On Behalf of | Jan 11, 2024 | Personal Injury

The Centers for Disease Control and Prevention report that about 25 million Americans visit emergency rooms each year for accidents or unintentional injuries. If you suffer an injury due to someone’s negligence, you may have the right to recover both economic and noneconomic damages.

Economic damages typically include medical expenses, lost wages and other specific costs resulting from your injury. However, noneconomic losses for pain and suffering are intangible and more difficult to quantify and calculate. Therefore, you probably wonder how a court or insurance company can determine an amount. Two methods are common in New York.

Multiplier method

One of the most basic ways to evaluate noneconomic damages for pain and suffering is the multiplier method. This method multiplies your economic loss by a certain factor, commonly ranging from 1.5 to 5, depending on the severity of the injury. The more severe the injury, the higher the multiplier would be.

For instance, if you incur $10,000 in medical expenses and lost wages, the court or insurance company might multiply that by 4 if the injury was catastrophic, such as a traumatic brain injury or disfigurement. This results in an additional $40,000 to compensate for the pain and suffering due to the injury.

Per diem method

Another way of determining noneconomic damages is the per diem method. With this calculation, you would receive a specific dollar amount for every day you experience pain and suffering.

The determination of the specific compensation amount depends on the severity, duration and frequency of the pain. For example, if you suffer from an accident injury for 60 days and a jury assesses that you should receive $100 per day in pain and suffering, you would receive $6,000 for noneconomic damages.

Determining which method is suitable for a case can be complex and depends on your total economic losses and the circumstances of your injury. A deep dive into the facts of your claim and an understanding of legal precedents allow you to decide how to negotiate your settlement or fight your case in court.


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