If you have recently been injured in an accident and are trying to understand what to do next, you may have encountered the term “damages.” It’s a common bit of shorthand used by personal injury lawyers to talk about the value of a case.
But what does “damages” really mean, and how are damages calculated?
To put it in simple terms, personal injury damages are financial compensation for the injuries and losses caused by negligent parties. It is often used interchangeably with the term “compensation.”
However, to fully understand what damages are and how they affect your personal injury case, we need to take a closer look. One of easiest ways to do this is to break them down into three main types of damages:
Below, we’ll examine each category more carefully to explain what is included and how attorneys calculate them.
Economic damages, also known as special damages, are the easiest to understand and quantify. They are intended to compensate injured victims for the financial loss directly caused by their injuries. If a loss can be attached to a specific, objective dollar figure, it’s an economic loss.
Some of the most notable examples of economic damages include:
It’s important to understand that economic damages include not only the medical bills, lost wages, and other related expenses that you’ve already accumulated, but also estimated future expenses and losses. If, for example, you need future medical care such as prescriptions, physical therapy, or additional surgeries, your economic damages should include these costs as well.
Similarly, if you are unable to continue in your line of work or would be unable to advance in your career as projected due to limitations from your injury, you can (and should) include this in projected lost wages and earning potential.
While economic damages are relatively easy to understand, they are not so easy to calculate. Estimating them accurately not only requires access to potentially dozens if not hundreds of medical bills and records, but also a comprehensive understanding of the long-term effect your injuries will have on your life (and your finances).
Unfortunately, many injured people fall into the trap of taking a quick settlement offer from the insurance company before realizing, sometimes months or even years down the road, that they severely underestimated their long-term financial needs.
At Truman Law Office, we carefully review your medical records and work alongside doctors and medical experts, life care planners, economists, and other qualified professionals who can accurately testify to the long-term costs or losses associated with your injuries. After years of experience representing injured folks throughout Kentucky and Indiana, we know where to look and work hard to make sure every economic loss you’re entitled to seek compensation for is properly accounted.
As you might have guessed by the name, non-economic damages (also known as general damages) have nothing to do with financial loss. Instead, the purpose of these damages is to compensate accident victims for the physical, mental, emotional, and psychological consequences they are facing as a result of their injuries.
Common examples of non-economic damages include:
Think of it this way: The point of financial compensation in a personal injury lawsuit is to make the injury victim “whole.”
In some personal injury cases, particularly after serious injuries, the pain and suffering victims experience can be tremendous. For example, a spinal cord injury could make it impossible to work, enjoy your hobbies, or live the active life you once led. If your monetary compensation only paid for your medical expenses and lost wages, that would hardly be sufficient to make you whole. It might leave you with a balanced checkbook, but it would ignore the fact that your life has been diminished, and you’ve been left in far worse shape than you were before.
As difficult as it is to calculate economic losses, pain and suffering is even harder to quantify. How can you place a monetary value on not being able to enjoy your favorite hobbies, or permanently altered relationships with friends and loved ones?
Nevertheless, there are some accepted methods for calculating non-economic damages. Usually, insurance companies will use some form of one of two methods:
The trick, of course, is determining what a fair method (and multiplier or daily rate) should be for your specific circumstances. Remember that insurance companies are businesses driven by profit. They are almost certainly going to select a method and make assumptions that undervalue your claim, particularly for their initial settlement offer.
An experienced injury lawyer can help determine the appropriate amount and help you fight for your right to non-economic damages. They will also be able to look up the damages paid in previous settlements and court awards for similar civil lawsuits.
Economic and non-economic damages are collectively referred to as “compensatory damages,” meaning they compensate accident victims for specific losses in an effort to make them whole.
Punitive damages, however, are different. They are not compensatory. Instead, they are meant to punish the defendant for reckless conduct and make an example out of them to deter future behavior.
It’s important to clarify that most personal injury cases will not result in any punitive damages being awarded to the plaintiff. A court will only award punitive damages if the defendant’s conduct can be considered especially reckless or malicious in nature. Simple negligence is not enough; their actions need to show complete disregard for the safety of others, and usually conscious awareness that what they are doing is wrong.
For example, if you were rear-ended by a distracted driver who failed to stop in time because they were distracted by the radio or checking their GPS, your settlement or court award almost certainly will not include punitive damages. But if you were hit by a severely drunk driver, or a driver who was traveling 70 miles per hour down a residential street, punitive damages may be on the table.
In most auto accident injury cases, no punitive damages will be awarded at all.
Since punitive damages are rare, there aren’t as many firm guidelines for how they are calculated or awarded. Partly for this reason, the thoroughness and skill of your attorney can make a big difference. Proving reckless behavior may require extensive accident reconstruction, careful interviewing of eyewitnesses, and moving quickly to preserve key evidence before it is lost or destroyed. Your attorney will also need to articulate why and how a larger award would deter future wrongdoers and contribute to public safety.
In Kentucky, there is no cap on the amount of punitive damages that can be awarded in a personal injury case. In Indiana, punitive damages are limited to either $50,000 or three times the amount of compensatory damages (your economic and non-economic damages), whichever is greater.
A good attorney can help your case in many ways. We’ve already talked about several of them, but it’s helpful to recap.
One, an experienced personal injury lawyer knows what information to gather and how to calculate fair estimates for your damages. And although no two personal injury cases are exactly the same, your attorney will also know what similar cases have settled for or won at trial in the past. This allows them to give you a realistic, evidence-based analysis of how much you deserve and what you are likely to recover.
Two, an attorney can be crucial in establishing the other party’s negligence. Due to comparative fault laws, if the defendant can pin some of the blame on you or cast reasonable doubt on who really caused the accident, they can reduce your recoverable damages by your percentage of fault. Personal injury attorneys know how to gather hard-to-get evidence (like cell phone records, vehicle data records, or security camera footage) and work with leading experts (such as accident reconstruction specialists) to put the blame squarely where it belongs.
More than that, though, a personal injury lawyer can fight for your right to fair compensation, which is often a significant challenge. Insurance companies are known to aggressively fight injury claims and they are good at trying to undermine your rights. They’ll even use their insurance adjusters to trick you into giving a recorded statement or say things that, taken out of context or viewed in an unfavorable light, could harm your case.
An attorney can make sure this doesn’t happen while using their legal acumen and negotiating skills to hold insurance companies accountable.
If you only suffered minor, temporary injuries—the accident did not have significant effect on your life and you’re just looking for help with a few hospital bills or a few weeks of lost wages—you may not need an attorney.
However, for anything more than that, hiring an experienced attorney to represent you is almost always worth it.
Personal injury claims are frequently complex and frustrating, particularly if you don’t have legal training, you’re up against an aggressive and well-prepared insurance company, and you’re still recovering from injury. Your attorney not only takes the weight and stress off your shoulders and allows you to focus on healing, but can often negotiate a much better settlement than you might be able to alone, even after considering attorney fees.
As for those attorney fees, you never have to worry about paying out of pocket or ending up worse off than you started. When you work with Karl Truman Law Office, you owe us nothing unless we win. We also have a 30-day guarantee, meaning that if you aren’t completely sure we’re the right law firm for you within 30 days of hiring us, you can walk away without owing us a penny.
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As mentioned above, every case is different. How much your case is worth depends entirely on the details of your situation, from how severe your injuries are and how expensive your medical treatment will be to what effect the injuries will have on your career and quality of life.
The best way to find out what your case is worth is to contact an experienced personal injury law firm for a free legal consultation. Don’t trust an online calculator to give you an accurate estimate.
And definitely don’t trust whatever the insurance company says your claim is worth, especially in their initial settlement offer. Insurance companies care about making money, first and foremost, and they want to settle your case as quickly and cheaply as possible. They care less about what you deserve and more about figuring out the lowest possible offer they think you’ll take. They will likely offer you much less than what you deserve unless you hold them accountable.
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At the Karl Truman Law Office, we have been fighting for our clients’ rights for more than a quarter century. We believe that every person injured due to someone else’s negligence has a right to fair treatment and compensation.
More than that, though, we are compassionate advocates for all accident victims in Indiana and Kentucky, and we work hard to make sure all our clients receive first-class treatment from the initial phone call, through the final settlement or trial, and even beyond.
Please give us a call today for a free consultation. You can reach our office in Louisville, Kentucky, at (502) 222-2222 or in Jeffersonville, Indiana, at (812) 282-8500.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.