How Compensation Is Determined on a Personal Injury Claim

If you’ve been injured in an accident that was the fault of another party, you’re probably entitled to at least some compensation to cover your expenses related to that injury. But, how much money should you get? That’s a question that many victims have and one that the personal injury experts at Grillo Law,, tell us is difficult to answer. That’s because there’s no one formula that gives a precise amount of compensation for every case.

Here’s more on how compensation is determined on a personal injury claim.

Factors That Are Considered in the Calculation

While most insurance companies do have a formula that they use to calculate settlement offers in personal injury cases, they don’t disclose how they arrive at their numbers. In fact, they may not admit that they use a formula at all since they don’t want to let attorneys know what they’re thinking in terms of a reasonable settlement. Even so, we can arrive at a ballpark figure by looking at the factors that are considered in any settlement calculation:

• Medical bills (both current and ongoing) and related expenses
• Missed work or lost wages
• Permanent disability or disfigurement
• Loss of family, social, and educational experiences
• Pain and other physical sufferings
• Emotional damages resulting from the above-mentioned factors

Of course, it’s fairly easy to add up all the medical bills you have and to determine what you’ve lost in work and wages, but it’s not so simple to put a dollar amount on the other factors. For instance, how much is your pain and suffering worth? What are your emotional damages? This is where the calculations can get a little murky.

Damages Formula

Again, there is no single formula used to calculate compensation in a personal injury case, but by looking at past settlements, we can come to an approximate amount that is reasonable for a case. Insurance companies start with adding up the actual amount of medical bills you’ve incurred and the anticipated future and ongoing medical expenses you will incur as you continue treatment.

Then, they will add the amount of money you’ve lost due to missed work and the amount of money you are expected to lose due to future missed work. If you are permanently disabled from the accident and won’t be able to work in your field or perform the same duties anymore, but will be able to work in another capacity, they will take the difference between the two wages and add that to your settlement total.

Finally, to calculate the pain and suffering, compensation for loss of experiences, compensation for permanent disability and disfigurement, and emotional damages, the insurance company will multiply your medical expenses by between 1.5 and 5 depending on the severity of your injuries. This amount will be added to your current and future lost wages to arrive at a starting point for compensation negotiations.


In truth, there is no set compensation amount that an attorney can give you before your case is settled. They can provide you with an estimate of what your case is worth based on previous settlements, but no two cases are exactly alike. The best advice is to consult with an attorney about your specific case to understand what your case may be worth and begin to pursue negotiations.

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