After a car accident, it’s often difficult for victims to determine the extent of their damages.
While researching claims, they may not know how to distinguish certain types of damages from others. Here’s an overview of the differences between economic vs. non-economic damages.
An Overview of Economic Damages
Economic damages, also called special damages in some jurisdictions, are losses with a direct monetary value.
In other words, they’re mostly financial losses that result from the car accident. The full extent of economic damages depends on a few factors, including the seriousness of the injuries and the amount of property damage.
Some economic damages examples include:
- Lost wages during recovery;
- Past and future medical treatment expenses;
- Vehicle repair or replacement;
- Rehabilitation or physical therapy;
- Reduced earning capacity; and
- Accessibility tools.
Out of all of these losses, medical expenses are the most common. Essentially, this category includes any treatments related to your car accident injury.
For example, if you are hospitalized, need surgery, and require follow-ups with a specialist—these are all considered economic damages.
In addition, if your condition requires long-term medications or assistive devices, you may claim these expenses as well.
How Economic Damages Are Calculated
Out of both damage types, economic damages are easier to calculate. Generally, attorneys calculate these losses by adding up all of the verifiable expenses related to the accident.
So, what constitutes a verifiable expense? Things like bills, receipts, estimates, bank statements, and paychecks all help in calculating economic damages.
Here’s an example of how that might work. Let’s say that John gets into a car accident and suffers a back injury. His hospitalization, including surgery, costs $25,000.
He also needs one year of physical therapy to restore some movement, which costs $5,000. His vehicle replacement is about $5,000, and his six missed paychecks during recovery amount to $15,000 in lost wages.
Therefore, his total economic damages are $50,000.
Since these damages may evolve over time, it’s important to start building your case immediately. Failure to file before the statute of limitations expires will forfeit your right to pursue damages.
An Overview of Non-Economic Damages
In a way, non-economic or general damages are the exact opposite of economic damages. Essentially, they refer to non-financial losses that aren’t easy to quantify because there are no associated invoices or receipts to add up.
For instance, some non-economic damages include:
- Mental anguish;
- Pain and suffering;
- Reduced quality of life; and
- Loss of consortium.
Arguably, these losses have an equal, if not greater, impact on the victim. Some injuries are so severe that the victim’s life changes forever. Maybe they can’t participate in one of their favorite hobbies anymore.
Or, perhaps they need assistance performing routine tasks such as showering, dressing, or eating. This is where non-economic damages come into play.
Determining the Value of Non-Economic Damages
The difference between calculating economic vs. non-economic damages is quite large.
Since non-economic damages have no standard price or cost, attorneys develop formulas to use depending on the circumstances of the case.
Using the previous example, let’s see how this may apply to a car accident. After John determines that he has $50,000 in economic damages, his attorney asks about how John’s injuries impact his life.
Before the accident, John participated in 5K runs every six months and volunteered as a scout leader. Since his injury, he can no longer do these activities.
In addition, since his back has permanent damage, he can’t walk without a cane. Based on this information, his attorney decides that using a multiplier of four is reasonable.
So the attorney will multiply John’s economic damages by four—bringing the total damages to $200,000.
Keep in mind that this isn’t the only way attorneys may calculate non-economic damages. Some may determine a per-day cost to the victim or come up with a more complex formula.
It ultimately depends on the specific situation of the victim.
Does California Cap Non-Economic Damages?
No, California doesn’t cap non-economic damages for car accident cases. However, some states do maintain a cap on these types of damages.
So it’s important to work with an attorney who understands the local laws regarding damage caps.
Need Help Calculating Your Damages? Call Weinberg Law Offices Today
Despite the differences between economic vs. non-economic damages, both are an essential part of any car accident claim.
If you need assistance calculating damages or have questions about your case, the Los Angeles car accident attorneys at Weinberg Law Offices are here to help. To schedule a free, no-obligation consultation, contact us online or give us a call at (818) 697-1079.
Disclaimer: This content should not be construed as legal advice.