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The Damages Calculation: Predicting What Your Case Is "Worth"

Jan. 4, 2019

When someone has been injured in an accident, one of the prime considerations is whether the claim is worth pursuing. Injury victims need to whether the facts and the overall situation would create a legal liability for someone else. Beyond that, they also want to know what kind of recovery they could obtain for their injuries and damages. That question is sometimes harder to answer, however.

Everyone’s case is different, and even some slight detail could significantly alter the value of your claim. However, there are some overarching “rules” that you can use to determine what your case may be worth.

The following information is the same method that most insurance companies will use to determine what amount may be appropriate to settle your case. It is often referred to as the “Damages Calculation.”

Your Damages in a Personal Injury Case

When you are injured, you likely have several different types of damages. They may include:

  • Medical expenses

  • Pain and suffering

  • Property damage

  • Lost wages

  • Mental anguish

  • Loss of consortium

  • Loss of enjoyment of life

Your specific injury will dictate which broad categories of damages are appropriate for your claim. For example, costs in the average car accident case may look very different compared to a medical malpractice lawsuit.

The most important damage in determining what your case is “worth” from an insurance perspective is usually your medical expenses. The higher your medical expenses, the more serious your injury likely is. If you have high medical costs, you are also more likely to experience long-term damage or side effects as well. Those can affect your wages in the long run, and your family life as well. As a general rule, the higher your medical costs, the higher your case is “worth” to the average insurance company, jury, or judge.

The Damages Calculation

Your medical expenses are probably not the only loss you experience as a result of an accident. However, your medical expenses can be used to predict your losses in other categories that less easy to quantify, such as mental anguish or pain and suffering.

Most insurance companies will start with your medical expenses and then multiply that number by a factor to estimate what your case is worth. That factor will vary depending on the seriousness of your injury or other personal information. For example, if you are a single mother of three, your factor will likely be higher than a woman who was in the same accident but does not have children. The factor increases based on who is dependent upon you and how sympathetic of a plaintiff you may be.

The average factor will range from three to five. Nonetheless, this simple multiplication process is just a starting point to value your case. From there, you should add in any lost wages you may have experienced, property damage, and any other tangible losses you may have had.

While this calculation is never absolutely correct for every case, it does give you a starting point to determine whether litigation is a good idea or where you might land regarding settlement.