How Personal Injury Settlements Are Calculated

Personal injury settlements are calculated by adding economic damages (medical bills, lost wages, future medical costs) plus non-economic damages (pain and suffering, emotional distress, loss of enjoyment of life).

Pain and suffering is typically calculated using the 'multiplier method' — multiplying economic damages by 1.5–5x depending on injury severity.

More severe, permanent injuries get higher multipliers. Some insurers use the 'per diem' method — assigning a daily dollar value to pain and suffering for each day of recovery..