The pain and suffering multiplier is a way of estimating how much compensation you deserve in a personal injury case. It multiplies your economic damages by a number between 1 and 5 to estimate your noneconomic damages. The multiplier method is one of the most common accident settlement formulas that personal injury lawyers and insurance companies use.
How does the multiplier method work?
The multiplier method uses the following formula to estimate the value of a personal injury claim: Economic damages + (economic damages x multiplier).
All personal injury claims demand compensation for all of your losses from the accident. These losses are grouped into 2 types of damages:
- economic damages, and
- noneconomic damages.
Your economic damages are those that can be easily stated in a dollar amount. The extent of these losses, which are sometimes called special damages, are often shown on a receipt or a bill. Some common examples of economic damages are your
- medical bills,
- lost wages, and
- receipts from repairing or replacing property damage.
They also include anticipated economic losses like the costs of your future medical treatment and your lost earning capacity.
Your noneconomic damages, however, cannot easily be stated in a dollar amount. Sometimes referred to as general damages, these include things like your:
- physical pain,
- emotional distress,
- mental anguish, especially of your physical injuries left you with a disfigurement,
- loss of enjoyment of life,
- reduction in quality of life,
- post-traumatic stress, and
- loved ones’ loss of consortium.
Because your noneconomic damages are so difficult to describe, financially, they have to be estimated. Personal injury attorneys and insurance adjusters do this by using a multiplier. The number is between 1 and 5. The more the injury affected your life, the higher the number. For example:
- if you fell and broke your arm but did not miss work and are back to normal after 6 months, the multiplier would probably be a 1, but
- if you suffered a spinal cord injury that leaves you paralyzed, the multiplier would be close to a 5.
The appropriate multiplier is applied to your economic damage total. This estimates your noneconomic damages. Your economic damages are then added to that estimate.
For example: Mary slips and falls and breaks her tailbone. She suffers $100,000 in medical expenses and other economic damages. After her injury heals, she finds it uncomfortable to sit for long periods of time. Her attorney and the insurance company decide on a multiplier of 2.5. This estimates her noneconomic damages at $250,000. A fair settlement offer would be $350,000.
Why is it used to estimate the pain and suffering settlement?
The pain and suffering multiplier is used to estimate your noneconomic damages because it does a good job of predicting your award in a jury verdict.
Most personal injury cases settle out of court. That settlement is the result of a negotiation process between your personal injury lawyer and the insurance company that would pay out the potential verdict.
However, jury verdicts for noneconomic damages tend to vary widely. Because there are no bills or receipts, reasonable people can disagree on how much to award for an injury.
The pain and suffering multiplier, however, generally produces results that are in line with typical verdicts.
Why do insurance companies use this method?
Insurance companies use the pain and suffering multiplier because it:
- produces reasonable results that are not out of line with jury verdicts in personal injury cases,
- is easy to use, and
- speeds up the personal injury settlement process.
However, many insurance adjusters do not use it until you have gotten the legal advice and representation of an accident attorney from a reputable law firm. Even after you have gotten representation, the insurance company will downplay the severity of the injuries that are shown in your medical records. A skilled attorney who is familiar with personal injury law can argue on the behalf of the injured person for a higher multiplier in their pain and suffering claim.
Does this only work in car accident cases or all personal injury lawsuits?
No, the pain and suffering multiplier can be used in any personal injury case, not just for car accidents. While auto accidents are the most common type of personal injury claim, the multiplier can be used to estimate the noneconomic damages suffered by claimants in the following types of cases:
- premises liability,
- medical malpractice,
- slip and falls,
- assault and battery,
- products liability, and
- dog bites.
What is the per diem method?
The pain and suffering multiplier is not the only way to estimate your noneconomic damages. In some cases, the per diem method can be used.
Under the per diem method, a certain amount of money is paid for each day that you suffered from the accident. That amount of this daily rate is usually based on your daily wages or earnings. Because the per diem method estimates your noneconomic damages, you receive compensation for your economic damages in addition to this amount.
For example: George was in a car accident and suffered severe injuries. X-rays reveal several broken bones and a brain injury. These serious injuries require extensive medical care and lead to lasting emotional trauma. In the end, George suffers $500,000 in economic damages. He suffers the effects of the accident for 2 years. Before the crash, George made $200 per day. Under the per diem method, his noneconomic damages would be $146,000 ($200 per day for 730 days). A fair settlement offer would be $646,000.
