Most personal-injury settlement calculators on the open web do one of two things. They either ask for medical bills and an injury severity, then multiply by an arbitrary number between 1.5 and 5; or they ask for the same inputs and pretend the answer is computed by a proprietary algorithm. Both produce numbers that look authoritative and are not.
The math that adjusters actually use is structured, but it is not magic. This article walks through it in three layers: economic damages, non-economic damages (the part most calculators get wrong), and the liability-and-jurisdiction discount that takes the gross number to a realistic settlement range.
Layer 1: economic damages, the part nearly everyone gets right
Economic damages are the documented, receipt-backed losses caused by the injury. They are not negotiable in the same way pain and suffering is. Either the bill exists or it does not.
There are four standard components:
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Past medical specials. Every doctor visit, ER bill, surgery, physical therapy, prescription, durable medical equipment, and ambulance bill from the date of injury to the date of demand. Billed amount, not paid amount, is the convention in most jurisdictions, although some states have adopted a “paid bills” rule that limits recovery to what was actually paid after insurance write-offs. The U.S. Department of Health and Human Services maintains the standard medical billing codes (CPT codes) that adjusters use to verify the bills.
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Projected future medical care. If the injury requires ongoing treatment, this is calculated as the present value of the future cost. For a herniated disc with epidural steroid injections recommended every six months for five years, the calculation is the per-injection cost multiplied by the number of injections, discounted to present value at a conventional rate (often the 10-year Treasury yield plus a small premium). Get a life-care planner involved if the projection is more than $25,000.
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Past lost wages. Pay stubs, employer wage-verification letters, tax returns. For W-2 employees, this is straightforward. For 1099 contractors and small business owners, the calculation is gross revenue lost minus variable costs that would have been incurred, then add the labor opportunity cost. Tax returns from the prior three years anchor the number.
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Loss of earning capacity. Different from lost wages. This is the present value of the difference between what the plaintiff was earning before the injury and what they can earn after. Requires a vocational expert in any case where the plaintiff is not back to pre-injury earning levels at the time of the demand.
Add those four numbers. Call the total E (economic damages).
Layer 2: non-economic damages, the part most calculators get wrong
Non-economic damages compensate for pain, suffering, mental anguish, loss of enjoyment of life, disfigurement, and (in some states) loss of consortium. There is no objective dollar figure for pain. There are two methods adjusters use to translate pain into dollars.
The multiplier method
Multiply the economic damages by a number between 1.5 and 5, where the multiplier reflects severity:
- 1.5 to 2 for soft-tissue injuries with full recovery in under six months (whiplash, sprains, contusions)
- 2 to 3 for moderate injuries with structural findings on imaging (disc protrusion, mild concussion, undisplaced fractures)
- 3 to 4 for severe injuries with documented permanency (surgery, hardware, ongoing impairment)
- 4 to 5 for catastrophic injuries (TBI with cognitive deficits, spinal cord injury, amputation, disfigurement)
The problem with the multiplier method is that the multiplier is not derived from anything. It is a convention. It is useful for fast back-of-envelope math but it is not what gets you to the right number.
The per-diem method
Pick a daily dollar value for pain, then multiply by the number of days the plaintiff has experienced (and will experience) the pain. The daily value is conventionally somewhere between the plaintiff’s daily wage and triple that figure. The duration is the medically documented treatment window, plus any documented residual permanency expressed in life expectancy.
A construction worker earning $300/day, with six months of acute treatment and a 10-percent permanent impairment rating to a 40-year life expectancy: the per-diem at $300/day × 180 days of acute treatment is $54,000, plus a residual permanency calculation (10% × 40 years × 365 days × $50/day for low-grade chronic discomfort) of $73,000, totals roughly $127,000 in non-economic damages.
The per-diem method takes longer but produces a number you can defend at deposition. Adjusters know which of the two methods you used. They respect the per-diem more.
Layer 3: the discount, where settlements actually live
Gross damages (economic plus non-economic) are not what settlements pay. Settlements pay a probability-weighted version of the gross.
The discount is driven by three factors:
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Liability probability. What is the probability a jury would find the defendant liable? In a clear rear-end collision with no comparative fault evidence, this might be 95%. In a slip-and-fall on a private staircase with no witnesses, it might be 50%. The gross damages are multiplied by this probability.
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Comparative-fault percentage. Even if liability is found, what is the probability the jury would assign some fault to the plaintiff? Each state’s comparative fault rule modifies this calculation. In a pure-contributory state (Alabama, Maryland, North Carolina, Virginia, DC), 1% plaintiff fault bars all recovery. In a modified comparative state with a 50% bar, plaintiff fault up to 49% reduces recovery proportionally but 50% or more bars it. In a pure comparative state, plaintiff fault simply reduces recovery proportionally.
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Time-value-of-money discount. Settlements pay today. Verdicts pay 18-24 months later after trial and possible appeal. The plaintiff and the carrier both discount the gross by the cost of waiting. This is typically 15-30% off the verdict-expected value.
A $200,000 gross damages number, with 80% liability probability, 10% plaintiff fault, and a 20% time-value discount, settles at:
$200,000 × 0.80 × 0.90 × 0.80 = $115,200.
That is what an honest adjuster’s structured calculation produces. That is also typically within $20,000 of where the case actually settles.
What the calculator on this site does
The case-value tool above runs the same three-layer calculation against the plaintiff’s inputs, plus a state-specific layer that applies the local comparative-fault rule, the SOL filing deadline (which affects negotiation leverage), and any applicable damage caps. The tool exposes the reasoning trace so you can see which inputs are driving the output and where the largest sensitivities are.
It does not replace a lawyer. It replaces the blind acceptance of an adjuster’s first offer with a documented counter-position you can defend.