When it comes to injuries sustained in an accident, the first thing that most people consider is their medical expenses. However, medical expenses are not the only one of several elements that the law could entitle an injured party to be compensated for. It is not a legal requirement to know all the damages available. It's the difference between a settlement that just covers your costs and one that truly reflects what the accident cost you.
The Two Main Categories That Cover Most Cases Are:
There are two general types of Personal Injury damages, economic damages and non-economic damages. In some cases, a third category of damages arises which is called punitive damages, but that only occurs under certain circumstances.
Economic Damages
Economic damages are monetary losses that can be meaningfully and readily measured. Car repairs, lost wages, and medical expenses are all included here. These are losses that can be backed up by receipts, medical records, invoices, pay stubs, etc. They are the quantifiable & documented damages you faced from the accident.
Non-Economic Damages
Non-economic damages are losses that don't have a dollar figure attached to them. The body pain experienced while healing. The fear that comes after the accident. What you can't do in the present. While it is more difficult to put a price on these losses, they are recoverable through Personal Injury law and in many severe injury cases, they may be the greatest proportion of compensation.
Medical Expenses — More Than Just Emergency Care
Medical costs are the most easily understood category of economic damages, although they're actually more extensive than many people think. If emergency care was needed, as well as hospitalization, surgeries, prescription medications, physical therapy, specialist visits, diagnostic imaging and medical equipment for use during recovery, these can all be included in a Personal Injury claim.
One thing many injured victims often fail to realize is that future medical expenses are also recoverable. If your injuries are expected to last a long time, or require further procedures or care, these costs should be included in your claim. One of the most common methods of “leaving money on the table” after a car accident is leaving the settlement without considering the long-term medical expenses.
Lost Wages and Reduced Earning Capacity
If an injury prevents you from returning to work, any loss of income while you are unable to work is covered. This includes wages, income from self-employment, freelance work or any paid time off you had to take due to not being able to return to work.
However, the more important one is the reduced earning capacity. When the injuries are serious and cause a permanent, substantial loss of earning capacity, you can no longer do the job you used to do, or you're only able to work your old position for a shorter period of time, or you have to work in a lower-paying position, the financial loss is not limited to the time you spend healing, and you can recover it. This type of damage is usually hard to prove and requires testimony from vocational experts and economists who can perform a calculation of the difference between what you would have made and what you can now make.
Pain and Suffering
Pain and suffering are added to the physical pain from the injury itself – the discomfort during the healing process, the chronic pain which can last and the restrictions of living as a direct consequence of what happened. It is one of the most discussed, yet it is also one of the least-understood categories in Personal Injury law.
It is not possible to give a formula for its calculation. Typically, either a multiplier applied to economic damages will be used or a daily rate method in which a dollar value is placed on each day the victim experiences pain. The exact number in any particular instance will vary with the severity of the injury, length of the healing period, and the extent to which the pain and its impact on the daily life of the person have been recorded.
Emotional Distress and Psychological Consequences
Serious accidents not only cause physical harm. Psychological distress resulting from what the injury victim has experienced is also a compensable type of emotional distress and is often a direct result of the injury itself, such as anxiety, depression, PTSD or sleep disorders.
Treatment records by mental health professionals documenting emotional distress, accounts of behavioral changes from family members or friends of the injured person, and in some instances formal psychological evaluations, may be documented. The more well-established and reliable the documentation, the more compelling these damages will be as evidence when negotiating a settlement or when it's time to go to trial.
Property Damage
Any damage or loss of your vehicle, phone, laptop, or personal property is recoverable as a part of your claim if it was damaged or destroyed in the accident. The property damage usually gets its own settlement and is usually settled sooner, but it should be a part of the total settlement for the accident.
Loss of Consortium
Loss of consortium is a form of damages that is given to the injured party's spouse (or other close family members in some states). It makes up for the damage the injury has caused to the relationship – the loss of companionship, emotional support, the ability to have a normal family life.
These damages are not sought in all cases but when severe and permanent injuries are involved, this may be an important part of the damages sought and cannot be overlooked.
Punitive Damages — When They Apply
Punitive damages are a unique form of damages. They are not intended to pay the injured party for a certain amount of loss. They are designed to deter a defendant from such conduct (which is sometimes reckless, malicious, or intentional) and to deter others from such conduct.
Punitive damages may be applicable in the following circumstances:
- A drunk driver causes a horrific accident.
- A company knowingly continues to sell a defective product.
- A property owner cautioned several times about a serious hazard, but took no action.
They're not found in every Personal Injury case and the burden of proof is greater than in a typical case for compensatory damages awards, but when they do apply, they can significantly boost the overall recovery.
Why is the Full Picture Important Before You Make a Decision?
This is because insurance companies calculate how much they believe the settlement should be, instead of fairly taking all your damages into consideration. Those calculations routinely include medical costs and lost wages (without any economic damages) and conservatively estimate future costs and then exclude any punitive damages that may apply.
Understanding the claim categories and what you are entitled to recover in each will allow you to determine whether the offer is reasonable, or if it is less than what the accident truly cost you. A Personal Injury lawyer will know how to evaluate each cause of action, collect the evidence to support each one, and accurately structure the demand to value the claim beyond the sum an insurance company is willing to settle for.
Frequently Asked Questions
What’s the Difference Between Economic and Non-Economic Damages?
Economic damages include losses of money where there is a particular and quantifiable amount, medical expenses, loss of income and property repair expenses. Non-economic damages are those things that are real but not easily measured, including physical pain, emotional distress and diminished quality of life. Both are recovered in a Personal Injury case and in severe injury claims, they may be a bigger part of the total damages
How Is the Amount of Compensation for Pain and Suffering Determined in a Personal Injury Case?
No required formula by law. The two most frequently employed methods are the "multiplier" method that uses the extent of the injury as a coefficient to multiply the total economic damages, and the "per diem" method involving the number of days of damages affected by the injury multiplied by a dollar amount representing the pain suffered each day. The resulting number will be greatly affected by the severity of the injury, duration of recovery, and documentation of the impact of the injury on each day.
Will I Be Able to Get Compensation for Ongoing Treatment?
Yes. If your injuries are continuing and require further procedures or treatment or extended rehabilitation, the cost of the future care is recoverable as part of your claim. Documentation from all treating physicians as well as in some cases, expert testimony regarding the likely course of your condition and the realistic cost of addressing over time is generally required for supporting future medical damages.
What Will Be the Consequences of the Awards of Punitive Damages, and When Will They Be Awarded?
No punitive damages are related to a specific dollar amount of loss. They are intended to be imposed on the defendants when their behavior is egregious or deliberate – for example, a drunk driver causing an accident or a manufacturer that willfully supplied a substandard product. Not all Personal Injury cases qualify for them and they would require a stronger case to be awarded, however, when they are granted, they can substantially enhance the recovery for a claimant.
How Does a Personal Injury Attorney Help When Calculating Damages?
Insurers will set a settlement price based on their own goals, which usually involve under compensation of non-economic damages, minimization of future damages, and ignoring claims such as loss of consortium or punitive damages. A Personal Injury lawyer will assess each of the recoverable categories, gather the documentation necessary to support each one, and build a demand that brings justice to victims. Not just what the insurer is willing to give on their own.