Understanding Economic Damages in Personal Injury Cases

Economic damages are the tangible, calculable financial losses you suffer as a result of an injury. Unlike pain and suffering, these damages can be documented with bills, receipts, and records. Understanding what qualifies as economic damages—and how to prove them—is essential for maximizing your settlement.

What Are Economic Damages?

Economic damages (also called "special damages") compensate you for actual financial losses. They're objective and verifiable, meaning you can point to specific documents proving the amount. Courts and insurance companies typically accept economic damages with less dispute than non-economic damages.

Categories of Economic Damages

1. Medical Expenses

Medical expenses usually form the largest component of economic damages. This includes:

Past Medical Expenses (Already Incurred)

• Emergency room visits
• Hospital stays
• Surgery and anesthesia
• Doctor visits and consultations
• Diagnostic tests (X-rays, MRIs, CT scans)
• Prescription medications
• Physical therapy and rehabilitation
• Chiropractic care
• Mental health treatment
• Medical equipment (crutches, wheelchairs, braces)
• Ambulance transportation

Future Medical Expenses (Expected)

If your injuries require ongoing treatment, you can claim anticipated future costs:

• Future surgeries
• Long-term physical therapy
• Ongoing medication
• Home healthcare
• Medical devices and replacements
• Life care needs for permanent injuries

Important: Future medical expenses typically require expert testimony from doctors or life care planners to establish necessity and cost.

2. Lost Wages and Income

You can recover compensation for income lost due to your injury:

Past Lost Wages

• Wages lost during recovery
• Sick days and vacation time used
• Bonuses and commissions missed
• Self-employment income lost

Future Lost Earning Capacity

If your injury affects your ability to work long-term:

• Reduced working hours
• Inability to perform previous job
• Career change to lower-paying work
• Permanent disability affecting employment
• Lost promotions or career advancement

Future earning capacity claims often require vocational experts and economists to calculate lifetime losses.

3. Property Damage

In vehicle accidents, property damage includes:

• Vehicle repair costs
• Total loss value if the vehicle is totaled
• Rental car expenses during repairs
• Personal property damaged in the accident (phone, laptop, etc.)
• Child car seats (should be replaced after any accident)

4. Out-of-Pocket Expenses

Various miscellaneous costs related to your injury:

• Transportation to medical appointments
• Parking at medical facilities
• Home modifications for disability (ramps, grab bars)
• Household help you couldn't do yourself
• Childcare during recovery
• Over-the-counter medications and supplies

How to Document Economic Damages

Thorough documentation is crucial. Keep organized records of:

Medical Documentation

• All medical bills (itemized statements)
• Insurance Explanation of Benefits (EOBs)
• Receipts for prescriptions and medical supplies
• Records of all appointments
• Doctor's notes regarding treatment necessity

Income Documentation

• Pay stubs from before and after the accident
• Tax returns (especially for self-employed)
• Letter from employer confirming missed work
• Documentation of used sick/vacation time
• Proof of missed bonuses or commissions

Property Documentation

• Repair estimates (get 2-3)
• Photos of damage
• Receipts for damaged personal items
• Blue book value for totaled vehicles

Expense Documentation

• Mileage log for medical travel
• Receipts for all accident-related purchases
• Invoices for household help or services

Calculating Future Economic Damages

Future damages require careful calculation considering:

Present Value

Future damages are typically reduced to "present value"—the amount that, if invested today, would equal the future amount when needed. This calculation uses:

• Expected inflation rates
• Investment return assumptions
• Life expectancy tables

Expert Testimony

Complex cases may require experts such as:

• Economists: Calculate lost earning capacity
• Vocational experts: Assess work limitations
• Life care planners: Project future medical needs
• Medical experts: Testify to treatment necessity

Common Issues with Economic Damages

Pre-Existing Conditions

Insurance companies often argue that treatment was for pre-existing conditions. However, you can recover for:

• Aggravation of pre-existing conditions
• New treatment needed due to the accident
• Acceleration of a degenerative condition

Excessive or Unnecessary Treatment

Insurers may claim some treatment was unnecessary. Protect yourself by:

• Following your doctor's recommendations
• Getting referrals for specialist treatment
• Avoiding gaps in treatment that suggest you didn't need it

Undocumented Expenses

You can only claim what you can prove. Common mistakes:

• Paying cash without receipts
• Not tracking mileage for appointments
• Failing to document household help from family

Economic Damages and Your Settlement

Economic damages serve two purposes in your settlement:

1. Direct compensation: You receive the actual amount of your documented losses
2. Multiplier base: Pain and suffering is often calculated as a multiple of economic damages

This means that thorough documentation of economic damages can significantly increase your total settlement.

Using Our Calculator

Our settlement calculator helps you estimate your total claim by:

1. Totaling your economic damages
2. Applying a pain and suffering multiplier based on injury severity
3. Adjusting for your state's negligence laws
4. Providing a realistic settlement range

Conclusion

Economic damages form the foundation of your personal injury claim. By understanding what qualifies and documenting everything meticulously, you ensure you're compensated for every dollar you've lost due to your injury.

Keep every receipt, track every expense, and don't assume anything is too small to claim. These documented losses not only ensure direct reimbursement but also help calculate appropriate pain and suffering compensation.