Whether you were involved in a car or truck accident or slipped and fell in a place of business, experiencing a serious injury can be devastating in many ways. It can create a significant financial burden as medical bills pile up and you have to take time away from work to heal and seek treatment.

It can also create emotional and psychological damage, making you afraid to get behind the wheel or causing mental anguish due to chronic pain. Both are examples of what the legal system refers to as “damages,” which are the losses you have suffered due to your injury.

Damages can be both economic and non-economic. Understanding how to properly calculate the value of your personal injury case and determine how much compensation you should seek requires knowing the difference between the two, how they are calculated, and how they can affect your case.

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The Difference Between Economic and Non-Economic Damages in Personal Injury Cases

If you have recently been injured due to someone else’s negligence, you may be thinking about pursuing compensation. Consider the following categories of damages and how they may factor into your claim.

Economic Damages

Economic damages are often the easiest to understand because they are meant to compensate you for any specific financial losses. These damages can be documented with receipts, invoices, and pay stubs. In some cases, you may need testimony from an expert witness, such as a financial advisor or physician.

Some examples of economic damages include:

  • Medical Bills: Invoices you receive for hospitalization, medical treatment, medication, and rehabilitation
  • Related Expenses: Expenses related to your injury, such as fuel for getting to doctor’s appointments or the costs of assistive devices
  • Lost Wages: Money lost due to your inability to work after being injured in an accident
  • Loss of Earning Potential: Money that may be lost in the future due to your accident-related disability
  • Property Damage: The cost of replacing items that were damaged due to the accident, such as your smartphone or vehicle

It’s important to know that any economic damages you claim must be backed up by evidence and directly related to the accident. For example, you will not be able to receive compensation for medical treatment for an injury or condition you had before the accident, especially if the incident did not cause it to worsen.

Non-Economic Damages

These types of damages are much more challenging to calculate, because they typically don’t come with receipts. Instead, they take a toll on your quality of life. Non-economic damages may include:

  • Emotional Distress: The emotional discomfort and anguish that can impact your ability to participate in normal daily activities
  • Pain and Suffering: The mental and physical pain you feel as a result of the accident and its aftermath
  • Loss of Enjoyment: How your accident has caused you to miss out on life’s opportunities and important moments
  • Loss of Consortium: The toll or strain your accident and injury takes on familial relationships
  • Lifelong Disability: How your injury has impacted your ability to have a normal daily life

Texas does not generally cap non-economic damages in personal injury cases, except in the case of medical malpractice. But it’s still important to know what kind of compensation is considered typical or reasonable for these damages, as this information can help you negotiate with insurers and other parties.

How Non-Economic Damages Are Calculated in a Lawsuit

In Texas, there is no official formula for calculating non-economic damages. However, insurance companies usually use one of two major methods to come up with a number that seems fair to them, given all you have been through.

The first of these is the “multiplier” method. This method assigns you a score between 1.5 and five based on the severity of your injury. The insurer may then multiply that number by your total economic damages to calculate what it offers you in a settlement.

The second method is often called the “per diem” method. This one assigns a daily dollar value (DDV) to your damages and multiplies it by the number of days your injury is expected to impact you.

For example, if you are likely to suffer for the next year and your DDV is $100, your settlement offer would be $100 x 365, which is $36,500.

Getting Legal Help with Valuing Your Case

Properly valuing a personal injury case is both an art and a science. It requires careful thought and deep knowledge of Texas law.

If you’ve recently been hurt due to someone else’s negligence, consider contacting a personal injury attorney for assistance with your case. He or she will be able to answer your questions about compensation, assess your damages, and advise you about what your case is likely worth as you pursue compensation for your injuries.