Methods Used By Insurance Companies To Determine Pain And Suffering

Not all damages have a clear dollar value, Insurance companies have created various methods for attaching a value to a claimant’s pain and suffering.

Problems that qualify as pain and suffering

• Painful sensations
• Physical discomfort
• Fear
• Grief
• Anxiety
• Embarrassment
• Inconvenience
• Inability to enjoy a hobby or a recreational activity
• Memory loss
• Sleep disturbances
• Lack of an appetite
• Confinement to wheelchair
• Loss of ability to control some region of body

Materials that provide evidence of pain and suffering

• Photographs
• Results of an imaging study
• Entries in a journal or diary
• Comments in an email
• Comments from neighbors or co-workers

The multiple ways that insurance companies attach a dollar amount to painful problems and emotional issues

Traditionally, most of them used a formula. One of the calculations in that formula called for multiplying a sum of the medical expenses by a selected figure. The selected figure, normally one within the range of 1.5 to 5 was supposed to represent the extent of the claimant’s pain and suffering. That same figure was called a multiplier.

Utilization of the multiplier helped the insurance companies to consider a claimant’s painful problems and emotional issues, during determination of a claim’s value. Once the multiplication operation had been completed, the product would be added to the number that represented the financial effect of the claimant’s lost earnings.

Some companies chose to use what has been called a per diem method. The adjusters that used that method would select a dollar amount as the value linked to a claimant’s daily problems. Then that selected dollar amount would be multiplied by the number of days that the injured victim spent in recovery, as per personal injury lawyer in Sydney.

Neither of the 2 methods described above, allowed the adjuster to take into account the source of the utilized treatment. Yet, insurance companies favor a treatment program that has been prescribed by a medical doctor, instead of a chiropractor.

The introduction of computer programs has provided insurance companies with a way to fix the deficiency in their earlier methods. Today, the software in the programs used by car insurers performs calculations that include a numerical representation of the treatment source.

By using such programs, insurers manage to obtain a more accurate estimate for the value of a claimant’s painful problems and emotional issues. The readout from the computer provides the adjuster with a starting point for negotiations.

Of course, claimants have the right to challenge the size of the adjuster’s opening bid. That challenge takes the form of a counteroffer, or a series of counteroffers. When an adjuster’s bid has elicited presentation of an acceptable counteroffer, then the 2 opposing parties should be ready to settle their dispute, and agree on the size of the payoff.

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