How Damages Are Calculated in Personal Injury Cases

Damages in personal injury claims are the monetary compensation that a plaintiff can seek after being injured as a result of another person’s negligence. The aim of awarding damages is to put the plaintiff in the same position as they would have been if the injury had never occurred. The calculation of damages involves various heads of losses that are proven through evidence, records, and legal principles.

Personal injury claims are fact-sensitive, and the amount of compensation can be significantly different from one case to another. If a person has suffered injuries as a result of another’s actions, consulting a personal injury lawyer in independence can assist in understanding how the calculation of damages may be done in accordance with local laws and the circumstances of the case.

Types of Damages

Damages can be broadly categorized into two heads: economic losses and non-economic losses. In certain cases, punitive damages may also be awarded if the defendant’s actions are grossly negligent and intentional.

What Are Economic Damages?

Economic damages are awarded to compensate for specific financial losses. These are the expenses that can be documented by invoices, receipts, and testimony.

Examples of economic damages are:

• Medical expenses
• Lost income
• Loss of earning capacity
• Property damage

Medical and lost work costs from motor vehicle crashes alone amount to billions of dollars annually.

What Are Non-Economic Damages?

Non-economic damages are damages that compensate for losses that do not have a specific dollar amount. These damages are more subjective and require supportive testimony or evidence.

Examples of non-economic damages include:

• Pain and suffering
• Loss of enjoyment of life
• Mental anguish

Non-economic damages can vary significantly depending on the impact of the injury on the individual’s life.

​​How Are Damages Determined?

Damages are determined by assessing all losses and having evidence to support them.

Steps to Determine Damages

• Record financial losses
• Assess future requirements
• Assess non-economic damages
• Use legal guidelines

Lawyers may use the services of doctors, economists, and vocational experts to determine current and future losses.

What Factors Influence the Amount of Damages?

Several factors determine the total amount of damages:

• Severity of injury: More severe injuries will result in higher damages.
• Effect on life: Loss of mobility, pain, and disability will increase non-economic damages.
• Medical expenses: Higher medical expenses will increase economic damages.
• Insurance limits: The defendant’s insurance coverage may set a limit on the amount of damages.

Some states have caps on certain types of damages, particularly non-economic damages, depending on the case.

How Do Insurance Companies Assign Values to Claims?

Insurance companies use formulas to assign values to claims, such as multiplying economic damages by a factor that takes into account pain and suffering. However, insurance companies may assign lower values than what a court may award.

Experienced attorneys can ensure that the damages awarded are accurate.

Key Takeaways

• Damages can be economic, non-economic, and, at times, punitive.
• Economic damages are measurable, such as medical expenses and lost income.
• Non-economic damages include pain and suffering, as well as loss of quality of life.
• Punitive damages are meant to punish egregious behavior.
• Calculations of damages are based on evidence and expert analysis.
• State laws can cap certain damages.
• The insurance company’s assessment of a case may not be the same as its value.