How Do Insurance Companies Assign A Dollar Value To Pain And Suffering?

There are no strict rules on what damages should go under the heading of pain and suffering? Still, most insurance companies do consider certain damages to qualify as pain and suffering.

Features of a harmful act, when it has caused pain or suffering

Each such act has no defined monetary value. Any such act might cause the victim to suffer some form of emotional reaction, such as grief or worry. By the same token, any such act might cause the victim to suffer a mental injury, such as extreme fear (phobia) or the loss of enjoyment of life. Possession of the latter fear could aid the development of suicidal tendencies, as per the personal injury lawyer in Elgin.

If such an act has no defined monetary value, then how does an insurance company place a dollar value on any setting, or any person that has been harmed by such a harmful act?

The adjusters at some companies use a multiplier method. An adjuster using that method would calculate the total for all of a claimant’s medical bills. Then the adjuster’s attention would turn to the nature of the reported injuries. How severe were they?

A user of the multiplier approach must pick a number between 1.5 and 5, one that should represent the severity of the claimant’s injuries. Claimants with a minor injury would get matched with a multiplier of 1.5 or 2. The selected multiplier becomes one of the factors in a multiplication operation. The other factor would be the total for all of the claimant’s medical costs.

One alternative to the multiplier approach would involve calculating the claimant’s costs on a per diem basis. That per diem figure must then become one factor in an equation that has 2 factors. The other factor would be the number of days in the claimant’s recovery.

There is no rule, concerning which of the 2 methods described above an insurance company should use, in order to calculate the value for a claimant’s pain and suffering. Insurance companies always objected to the fact that neither method took into consideration the type of provider that had directed the treatment plan for the injured victim.

Today, a third approach has helped to solve the problem that had plagued insurance adjusters in the past. That 3rd approach involves using a computer program. Computer software can be designed to value pain and suffering in accordance with the type of medical provider that has administered the needed treatment.

When an insurance company uses such software, it lowers the value for a claim that has come from a victim that consulted a chiropractor. Insurance companies have never chosen to put much value on any treatment plan that might have been designed by a chiropractor.