Been injured? Wondering what can you get compensated for?
Most folks think personal injury compensation only covers medical bills. Well, that’s a big mistake.
Earning maximum personal injury compensation requires a comprehensive claim. Don’t leave money on the table by forgetting the various categories of compensation available to injury victims.
Truth is, there are 3 main types of damages. When you understand what each one covers, you can build a much stronger case for all available compensation.
In this guide, we’ll break down the 3 types of compensation for personal injury. This includes what each type covers, plus tips on how to maximize your total compensation.
Here’s what we cover:
- The 3 Main Types of Personal Injury Compensation
- Economic Damages: Covering Your Financial Losses
- Non-Economic Damages: The Hidden Costs of an Injury
- When Punitive Damages Come Into Play
The 3 Main Types of Personal Injury Compensation
Personal injury compensation isn’t a single figure. It’s 3 categories of damages which cover different types of losses.
If another person or party’s negligence causes your injuries, you’re entitled to compensation. There are different ways the law recognizes that you have suffered different types of losses.
The easiest are those that come with receipts and bills. Others are harder to quantify, like pain and suffering.
Experienced injury lawyers know how to build comprehensive personal injury cases. They address all categories of damage. Whether you hire a Louisiana injury lawyer or an attorney in another state, they should be looking for all possible types of compensation.
The three main categories of compensation include:
- Economic damages – Your actual financial losses
- Non-economic damages – Your pain, suffering, and life changes
- Punitive damages – Punishment for extremely bad conduct
Economic Damages: Covering Your Financial Losses
Economic damages are the easiest to understand. They are your actual financial losses because of your injury.
That means each dollar amount can be tied to a bill, a receipt, or proof that you’ve spent money or lost income.
Economic damages typically include:
- Medical expenses (past and future)
- Lost wages and earning capacity
- Property damage
- Rehabilitation costs
- Travel expenses to get medical care
Here’s the interesting thing. 95% of personal injury cases settle before trial. Most injured people never get to see what a jury might award for their economic damages.
The most important thing about economic damages is documentation. Save every receipt, pay stub, and medical bill as evidence of your losses.
The hardest ones to prove are future economic damages. If you can no longer work the same job, or require ongoing medical care, you need experts. Economists and medical professionals will testify to the future cost of those injuries.
Non-Economic Damages: The Hidden Costs of an Injury
Non-economic damages are where it gets trickier. These types of damages compensate you for things that do not have a specific receipt.
The most obvious non-economic damage is pain and suffering. However, that’s not the only non-economic damage category. These include:
- Physical pain and discomfort
- Emotional distress and mental anguish
- Loss of enjoyment of life
- Disfigurement and scarring
- Loss of consortium (relationships)
Here’s the problem. How do you put a price on pain?
Courts generally use one of two methods for pain and suffering. The multiplier method assigns a multiple of your economic damages. Typically, this is between 1.5 to 5X, depending on the injury.
The per diem method assigns a daily value to your pain. The total is the daily rate multiplied by the number of days until you recover.
Most folks don’t realize this…
Non-economic damages often make up the biggest part of any personal injury settlement. For serious injury cases, pain and suffering awards can be 2 to 3X higher than medical bills.
Some states have limits on non-economic damages, especially for medical malpractice. Other states have no caps at all. This is why you need a lawyer who knows the laws in your state.
When Punitive Damages Come Into Play
Punitive damages are different from the other two. They are not about compensating you, they are about punishing the other party.
Punitive damages typically apply in these types of cases:
- Drunk driving
- Intentional acts
- Gross negligence
- When the defendant showed zero care for safety
Punitive damages are about teaching the defendant and everyone else that this behavior is unacceptable.
The problem? Punitive damages are not very common. Most personal injury cases only involve economic and non-economic damages.
Punitive damages usually require the plaintiff to show the defendant acted with malice, fraud, or at least extreme recklessness.
The dollar amounts involved, however, can be huge. Recent verdicts show punitive damage awards ranging from hundreds of thousands to millions of dollars.
Tips for Maximizing Your Total Compensation
Wondering how to get the maximum compensation available? Here are the most important tips.
Document everything. Keep a record of your expenses, pain level, and how the injury impacts your life.
Seek proper medical treatment. You cannot recover damages for injuries you don’t document. Follow your doctor’s treatment plan. Keep records and attend all your appointments.
Do not rush to settle. Insurance companies want you to settle as soon as possible, for as little as possible. Understand the extent of your injuries before accepting a settlement.
Hire experienced legal counsel. The difference between a good lawyer and a great one can easily be tens of thousands of dollars in additional compensation.
Be cautious on social media. Insurance companies are monitoring you. Anything you post can be used against you in your claim for non-economic damages.
Settlement or Trial? Know Your Options
Settlement is much more common than trial, but knowing what happens in court can help you evaluate settlement offers.
At trial, a jury decides your compensation. Juries hear all the evidence and decide what they think is fair. The total can be much higher than what an insurance company will settle for.
However, there’s a reason most cases settle. Trials are risky. You might get more compensation, but you might also get less. Settlement is the known, the jury verdict is the unknown. You know exactly what you get and when.
Insurance Companies Are Not Your Friends
The vast majority of personal injury compensation comes from insurance companies. It’s not usually the person who injured you who is responsible for paying your claim.
This is where things get interesting. Insurance companies have a fiduciary duty to their shareholders. They must minimize any payouts they can.
Insurance companies are not your friends, even when they act like it. They have adjusters, lawyers, and medical experts all working to pay you as little as possible.
Working with experienced legal counsel is one of the best ways to level the playing field.
State Laws Affect Available Compensation
Personal injury laws vary widely from state to state. Some states have no-fault insurance that may limit your right to sue. Others have damage caps that place a maximum on certain types of compensation.
Comparative fault rules also vary state by state. In some states, if you are partly to blame for your injuries, your compensation is reduced by that percentage.
This is just one more reason it’s so important to work with local counsel who knows your state’s specific laws.
The Bottom Line
Personal injury compensation comes in three main types. There are economic damages which cover your financial losses. Non-economic damages which cover pain and suffering and other life changes.
The third type is punitive damages for punishing especially egregious conduct. The key takeaway here is that most injured people underestimate what they’re entitled to claim.
Economic damages are just the beginning. For serious injuries, non-economic damages often make up the majority of any personal injury settlement.
Do not accept a lowball settlement offer from an insurance company. Document everything, get proper medical care, and hire experienced legal counsel. The right lawyer will know how to evaluate every category of compensation and maximize what you recover.
Your future is on the line here. Get it right the first time.
