An accident can affect much more than your physical health. Medical treatment can be expensive, time away from work can reduce your income, and serious injuries may create financial expenses that continue for months or years.
In a personal injury case, many of these financial losses are known as economic damages. Economic damages are intended to compensate an injured person for the measurable monetary losses caused by an accident or injury.
Understanding what qualifies as economic damages and how these losses are calculated can help you evaluate the potential value of a personal injury claim.
What Are Economic Damages?
Economic damages are the financial losses you experience because of an injury. Unlike non-economic damages, which compensate for losses such as pain and suffering, economic damages generally have a specific dollar value or can be reasonably calculated.
For example, if you receive a $5,000 hospital bill after a car accident, that expense may be considered an economic loss. The same may be true if your injuries cause you to miss weeks of work and lose $2,000 in wages.
Economic damages can include losses you have already experienced as well as financial losses you are reasonably expected to experience in the future.
What Types of Economic Damages Can I Recover?
The economic damages available in a personal injury case depend on the nature and severity of your injuries. Some people recover relatively quickly and have limited financial losses. Others may require extensive medical care and be unable to return to their previous jobs.
Common examples of economic damages include:
- Medical bills
- Emergency room expenses
- Hospital stays
- Surgery and other medical procedures
- Prescription medication
- Physical and occupational therapy
- Rehabilitation
- Medical equipment
- Lost wages
- Lost employment benefits
- Reduced earning capacity
- Future medical expenses
- Property damage
- Certain out-of-pocket expenses
Keeping records of these losses can make it easier to document the financial impact of an accident and pursue appropriate compensation.
Are Future Medical Expenses Considered Economic Damages?
Yes. Economic damages are not necessarily limited to expenses you have already paid or bills you have already received.
A serious injury may require medical treatment long after a personal injury claim is filed. For example, you may need additional surgery, ongoing physical therapy, prescription medications, mobility equipment, or in-home assistance.
Future medical expenses can be more difficult to calculate because the treatment has not yet occurred. Medical records, treatment plans, physician opinions, and expert testimony may be used to estimate the type, duration, and cost of future care.
This is one reason it may be important to understand your long-term prognosis before resolving a personal injury claim.
Can I Recover Lost Wages After an Accident?
If an injury prevents you from working, the income you lose during your recovery may qualify as economic damages.
Lost wages can include income you missed while attending medical appointments, recovering at home, undergoing surgery, or otherwise being unable to perform your job. Depending on the circumstances, lost bonuses, commissions, overtime, and employment benefits may also be considered.
Evidence used to establish lost income may include:
- Pay stubs
- Tax returns
- W-2 or 1099 forms
- Employment records
- Statements from an employer
- Documentation showing missed work
Self-employed individuals may use business records, invoices, contracts, tax documents, and other financial information to demonstrate lost income.
What Is Loss of Earning Capacity?
Lost wages generally refer to income you have already missed. Loss of earning capacity addresses how an injury may affect your ability to earn money in the future.
For example, a construction worker who suffers a permanent physical disability may no longer be able to perform physically demanding work. Even if that person can return to a different job, they may earn substantially less than they would have without the injury.
Calculating diminished earning capacity may require consideration of the injured person’s age, occupation, education, work history, skills, expected career path, and physical limitations. Economists, vocational experts, and other professionals may provide opinions about the value of these future losses.
How Are Economic Damages Calculated?
Some economic damages are relatively straightforward to calculate. Medical bills, repair invoices, and documented lost wages provide specific figures that can be added together.
Future losses can require a more detailed analysis. The calculation may consider anticipated medical treatment, future employment limitations, inflation, expected wage growth, and other factors.
Evidence used to calculate economic damages may include medical bills and records, receipts, invoices, wage statements, tax returns, employment records, and expert testimony.
Accurately calculating these damages is important because accepting a settlement generally ends your ability to seek additional compensation for the same claim later.
What Is the Difference Between Economic and Non-Economic Damages?
Economic and non-economic damages compensate an injured person for different types of losses.
Economic damages compensate for measurable financial losses, such as medical expenses and lost income. Non-economic damages compensate for the personal consequences of an injury that do not have an obvious price tag.
Depending on the case, non-economic damages may include compensation for:
- Physical pain and suffering
- Emotional distress
- Mental anguish
- Loss of enjoyment of life
- Disfigurement
- Permanent disability
A serious accident can result in both types of damages. For example, a person with a spinal cord injury might have substantial medical expenses and lost earning capacity while also experiencing pain, emotional distress, and significant limitations on everyday activities.
Contact a Personal Injury Lawyer at Triumph Law Group for a Free Consultation
Economic damages can add up quickly after an accident, especially when medical bills, lost income, and future expenses are involved. Understanding the full extent of these losses is important before accepting a settlement or resolving your claim.
Triumph Law Group can evaluate your financial losses and determine what compensation may be available. Our personal injury lawyers can review your medical expenses, lost wages, future care needs, and other accident-related costs. Contact us today to schedule a free consultation and learn more about your legal options.
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