How do you put a price on "pain and suffering"?

Question

In insurance claims involving personal injury, an amount is usually added for the victim's pain and suffering. How is this calculated? "Pain and suffering" is not an objective measure - everyone perceives pain in a different way. What hurts one person may not hurt another so much. So how do they know how much to pay?

Answer 1

It's similar to the odds given by a bookie. The offering by the Insurance company is an amount calculated to keep you out of court. A jury may award obscene amounts (or nothing) for pain & suffering. Sometimes this is used by the jury as a punishment against the insurance company. In short, the offering has nothing to do with your actual suffering, it has to do with getting you to settle.

Answer 2

I was going to write a long answer, but I found this answer to your question some time ago.  The write up is pretty good.  

http://injury-law.freeadvice.com/injury-...

Also, most adjusters after awhile just know what the settlement value is based on experience.  They handle hundreds, if not thousands of claims.  Pricing a case becomes second nature.  Prior to having that knowledge, they will "round table" or discuss settlement values with their supervisor.