FAQ: How is a settlement calculated?

A personal injury settlement is calculated by adding up all of the tangible and intangible losses you sustained from an injury. There is no set “calculator” or equation to get to this number, but there are certain methods that can be used to help you understand the approximate value of your case. Learn more about the factors that are considered when calculating a settlement below.


To understand how to calculate a settlement, it is first important to talk about how insurance companies categorize damages:

1. Special Damages (Economic)

Special damages are tangible hard costs that can be measured with invoices, receipts, and wage statements. These include, but are not limited to:

  • Medical expenses
  • Lost earnings
  • Pecuniary damages, which is the loss of past and future income
  • Future medical expenses
  • Rehabilitation
  • Cost of medication
  • Cost of medical equipment
  • Other out-of-pocket expenses

2. General Damages (Non-Economic)

Intangible losses that can be difficult to measure, but may be given on top of the special damages settlement amount. These include, but are not limited to:

  • Pain and suffering
  • Loss of consortium
  • Reduced quality of life
  • Disruption to daily routine
  • Loss of enjoyment
  • Emotional distress
  • Post traumatic stress disorder

While these special damages aren’t clear-cut numbers on paper, their effects are just as harmful to a victim’s everyday life. It is just as important that you receive compensation for non-economic damages as it is to cover your medical bills and more.

Methods to Calculating Pain and Suffering (AKA: General Damages)

Your pain and suffering can never be the same as another’s. Two people can sustain exactly the same injury, but one person may have a different experience than the other. One may develop depression while the other does not or it may prevent one person from working while it does not affect someone else.

It is not easy to pin a dollar amount on general damages. But there are a number of approaches that insurance companies and lawyers take when calculating pain and suffering as part of an injury settlement.

  • Multiplier Method – this method is based on the belief that injuries with higher quantifiable damages tend to involve more serious consequences overall and thus require a multiplier to determine the accident’s true cost. Add up all the special damages and multiply those by a number between one and five. The multiplying figure will be lower or higher depending on the severity of your injuries, any aggravating circumstances, and the amount of time you need to recover, and more. For example, a truck accident multiplier might be five while a fender bender might only be two.
  • Per Diem – also known as the daily rate method, the per diem method involves generating a monetary amount for every day you had to live with the pain caused by your accident.

Why You Need the Help of a Personal Injury Lawyer to Calculate a Fair Settlement Amount

In the first stages of the process, the insurance company might offer you an initial settlement amount. It is important to remember that they are trying to get you to accept the offer — which is usually less than what you are owed— as soon as possible. Make sure you weigh all of your options before signing!

When you get a lawyer involved as soon as possible, we can help you determine if this offer is sufficient or if you deserve more. When calculating a settlement amount to send to the insurance company, we help you gather and add up all of the tangible costs, but also take a look at the whole picture of your suffering.

We will take into account several other factors, including:

  • The type of injuries you sustained in the accident
  • The severity of your injuries
  • Length of time it will take for you to recover
  • Whether you have permanent disability, scarring, or disfigurement
  • How the injuries impact your daily life
  • The impact on the relationships between yourself and family members
  • Your prognosis for the future

Just as your injuries are unique, so are the settlement amounts from one case to the next. Only a personal injury lawyer can calculate the maximum amount that you are owed.


Personal Injury Lawyer | The Hayden Law Firm

An experienced personal injury lawyer in St. Louis not only knows how to calculate hard costs on paper, but how to convey to a jury the level of pain and suffering you have endured because of the negligence, recklessness, or carelessness of the defendant. This could make all the difference.

If you have been injured in an accident, do not hesitate to contact us or call St. Louis personal injury lawyer Amanda Hayden at (314) 480-3100 for a free, no-risk consultation


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