How Your Settlement is Calculated For Your Personal Injury Claim

The Short Answer

In North Carolina, a personal injury claim is typically calculated by adding up the victim’s measurable economic losses, like medical bills and lost wages. To account for non-economic damages such as pain, suffering, and emotional distress, two common methods are used: applying a multiplier (usually between 1.5 and 5) to economic damages, or sometimes employing the per diem method, which assigns a specific daily dollar amount for each day the victim experiences suffering. The specific method and value used depend on the severity and impact of the injuries. This estimated total gives a ballpark value we use for personal injury settlement negotiations. Limits such as contributory negligence and damage caps also influence how the total settlement is valued.

Key Takeaways

• Claims are based on two main types of damages:
  • Economic damages (medical bills, lost income)
  • Non-economic damages (pain, suffering, emotional distress)
• Medical special damages are calculated using actual costs like treatment, medications, and travel expenses related to care.
• Lost wages are added to reflect income missed due to the injury.
• Non-economic damages are estimated using a multiplier method, where medical costs are multiplied by 1.5 to 5 based on:
  • Severity of the injury
  • Length and difficulty of recovery
  • Long-term or permanent effects
• The per diem method, which assigns a daily value for pain and suffering, is another way non-economic damages may be estimated.
• Insurance companies use these calculations as starting points for settlement offers—not guarantees.
• North Carolina follows a strict contributory negligence rule, meaning if you’re even 1% at fault for the accident, you may be barred from receiving any compensation.
• State-specific laws affect your timeline and recovery limits: You typically have 3 years to file a personal injury claim in North Carolina, and certain cases (like medical malpractice) may face caps on non-economic damages.
• Working with a personal injury lawyer can help strengthen your case and potentially increase the compensation you receive.

What Costs and Damages Go Into a Personal Injury Claim

When considering an insurance or injury claim, the victim has a right to compensation for several categories of costs or “damages” which are usually either economic or non-economic damages. Economic damages are easily added up and calculated, while non-economic damages are more subjective.

Economic Damages

Economic damages are the financial losses you can easily add up using receipts, bills, or pay stubs. They’re the tangible, out-of-pocket costs of your injury, and they form the foundation of most personal injury claims.

Here are the most common types:

Medical Special Damages (also called “specials”)

To calculate these, you simply add up all the documented costs related to your medical care. These include:

• Hospital and emergency care
• Doctor visits and specialist appointments
• Physical therapy or rehabilitation
• Prescription medications
• Medical equipment or supplies
• Travel expenses related to treatment

Lost Wages

If your injury kept you from working, temporarily or permanently, you can claim the income you’ve missed. You’ll typically use pay stubs, tax returns, or employer statements to prove and calculate this amount.

This may include:

• Lost earnings due to missed time at work
• Reduced earning capacity if you can’t return to the same job
• Loss of future income in severe cases

Non-Economic Damages

Non-economic damages aren’t about bills or receipts. They’re about what you’ve lost that can’t be measured in dollars and cents. These are more subjective and often require legal argument and supporting evidence.

• Physical pain and suffering
• The permanent impacts of the injury, including physical disability and/or disfigurement
• Loss of enjoyment of life affecting things like being unable to attend social events, play with your kids, or enjoy hobbies
• Emotional damages, distress, or trauma

Because these don’t come with a fixed price tag, courts and insurance companies often use methods like the multiplier or per diem approach to estimate their value, both of which we break down in the next sections.

How Non-Economic Damages are Calculated in North Carolina

There is no one way to calculate damages for personal injury claims. Instead, settlements are often calculated by combining economic damages and compensation for your pain and suffering. But to obtain a general estimate of what your damages might be worth, insurance companies and personal injury lawyers often use one of the following formulas.

The Multiplier Method Formula

Here’s how it generally works:

(Medical Special Damages × Multiplier) + Lost Income = Estimated Settlement Value

• Medical special damages include things like treatment costs, medications, and transportation to appointments.
• The multiplier is usually between 1.5 and 5, depending on:
  • How severe the injury is
  • How intense or long the recovery is
  • Whether there are lasting effects (like disability or disfigurement)
• Lost income is added on top to account for missed work.

How the Pain and Suffering Multiplier Is Chosen

The multiplier in a personal injury claim reflects the severity of your injury and how much it has disrupted your life. Just know that this is not a rigid scale, but it is a good reference for understanding where your case may fall. 

Multiplier	Severity Level	When It’s Typically Used
1.5 – 2.0	Minor	Soft-tissue injuries (like sprains or bruises), short recovery, minimal medical treatment, no lasting effects.
2.1 – 3.0	Moderate	Fractures, extended physical therapy, visible scarring, several weeks of pain, some activity restrictions.
3.1 – 4.0	Serious	Surgeries, long-term recovery, chronic pain, partial disability, ongoing emotional distress.
4.1 – 5.0+	Severe to Catastrophic	Permanent disability, disfigurement, loss of mobility, brain injury, loss of life enjoyment, or trauma requiring psychological treatment.

Example Settlement Calculations

To make this a little clearer, let’s walk through 2 sample scenarios involving the same person but very different outcomes.

Example 1: Mild Injury, Fast Recovery

Michelle is injured when a piece of plaster falls from a poorly maintained ceiling. She gets a deep cut on her forehead, needing stitches, and is left with a small scar. Luckily, she heals quickly and has no long-term issues.

• Medical costs: $2,500
• Multiplier used: 1.5 (minor injury, quick recovery)
• Estimated damages: $2,500 × 1.5 = $3,750
  • Any lost income is then added

Example 2: Severe Injury, Long-Term Impact

Now imagine that a much larger piece of plaster falls, causing Michelle to suffer a traumatic brain injury. She’s been in a coma for 4 days, faces a long recovery, and now has permanent mobility issues.

• Medical costs: $125,000
• Multiplier used: 4 (major injury, lasting effects)
• Estimated damages: $125,000 × 4 = $500,000
  • Any lost income is then added

The Per Diem Formula

In addition to the multiplier method, another way to estimate pain and suffering damages is the per diem method. “Per diem” means “per day,” and this approach assigns a specific dollar amount for each day the victim experiences pain, discomfort, or disruption to daily life due to the injury.

How It Works

A daily rate is chosen, often based on the injured person’s daily wage or a reasonable estimate of what their daily suffering is worth. This rate is then multiplied by the number of days the person is expected to endure physical and emotional hardship.

Example:
If someone is in recovery for 100 days and assigns a daily suffering rate of $150, the total pain and suffering damages would be:
$150 × 100 = $15,000

We don’t always use the per diem method, but it can be a helpful way to calculate pain and suffering. It’s more common when a case goes to court, especially if a jury is involved, because it helps put your experience into everyday terms. That said, as personal injury lawyers, we only use it when it makes sense and when there’s enough documentation to back it up.

How North Carolina Law Affects Personal Injury Calculations

North Carolina has a few unique legal rules that can affect your personal injury settlement. One of the most important is the state’s contributory negligence rule, which bars you from recovering any compensation if you’re found even 1% at fault for the accident. 

There are also strict deadlines for filing (the statute of limitations), which are generally 3 years for personal injury and 2 years for wrongful death cases. And while most claims in the state don’t have caps on damages, medical malpractice cases do have a limit on how much you can receive for non-economic losses like pain and suffering.

Finally, North Carolina also follows the collateral source rule, which allows your claim to reflect the full value of medical expenses, even if your insurance has already paid some of those costs.

These rules can be complicated, and they won’t apply the same way to every case. If you’re unsure how these laws might affect your settlement, a personal injury lawyer can walk you through what applies and help you build the strongest possible claim.

Why Legal Representation Matters

When it comes to calculating a personal injury settlement, there’s more at play than just plugging numbers into a formula. Proving fault, documenting losses, gathering expert testimony, negotiating with insurance companies, and understanding how North Carolina law applies can all affect the final outcome. A personal injury lawyer can help you avoid costly mistakes and fight for the full compensation you may be entitled to.

Consult a Personal Injury Lawyer to Find Out How Much Your Case May Be Worth

If you have been injured in North Carolina and need help representing your injury claim, we proudly serve injured individuals in Winston-Salem, Greensboro, Salisbury, Lexington, and throughout North Carolina. 

Contact Lewis & Keller Injury Lawyers now to receive a free consultation and to potentially start asserting your claim today.

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