• medical care and related expenses
• income lost because of the accident, because of time spent unable to work or undergoing medical treatment for injuries
• permanent physical disability or disfigurement
• loss of family, social, and educational experiences, including missed school or training, vacation or recreation, or a special event
• emotional damages, such as stress, embarrassment, depression, or strains on family relationships — for example, the inability to take care of children, anxiety over the effects of an accident on an unborn child, or interference with sexual relations, and
• damaged property.

The person who is liable for an accident–therefore his or her liability insurance company–must pay an injured person for these damages.

The Insurance Company’s Damages Formula

When determining compensation, it is usually simple to add up the money spent and money lost. However, there is no precise way to put a dollar figure on pain and suffering, on missed experiences, and lost opportunities. That’s where an insurance company’s damages formula comes in.

At the beginning of claim negotiations, an insurance adjuster adds up the total medical expenses related to the injury. These expenses are referred to as “medical special damages” or simply “specials.” That’s the base figure the adjuster uses to figure out how much to pay the injured person for pain, suffering, and other non-monetary losses, which are called “general” damages.

When the injuries are relatively minor, the adjuster multiplies the amount of special damages by 1.5 or 2. When the injuries are particularly painful, serious, or long-lasting, the adjuster multiplies the amount of special damages by up to 5, however, the multiplier may be as great as 10 in extreme cases.)

The adjuster then adds on any income lost as a result of the injuries.

That’s all there is to the formula. However, this figure — medical specials multiplied by a number between 1.5 and 5, then added to lost income — is not a final compensation amount but only the number from which negotiations begin.

Percentage of Fault
The extent each person is at fault is the most important factor affecting how much the insurance company is likely to pay. The damages formula gives you a range of how much your injuries might be worth, but only after you figure in the question of fault do you know the actual compensation value of your claim — that is, how much an insurance company will pay you.

Determining fault for an accident is not an exact science, but in most claims both you and the insurance adjuster will at least have a good idea whether the insured person was entirely at fault, or if you were a little at fault, or if you were a lot at fault. Whatever that rough percentage of your comparative fault might be — 10%, 50%, 75% — is the amount by which the damages formula total will be reduced to arrive at a final figure.

Keep in mind these is just an estimate. In the end, other factors can affect your settlement including the jury’s decision (if trial occurs) and your personal injury attorney’s fee, usually somewhere around 33%.