The Math: How Damages Are Calculated

There are typically two types of financial losses or “damages” to recover: special and general.

Let’s take a closer look at the two different types below for more clarity:

Special damages, also called economic damages, are easier to estimate since they include all allowable out-of-pocket costs related to your client’s accident. They are objective and reasonably easy to quantify through evidence.

Six examples of special damages include:

• Property damage
• Current and future medical costs
• Current and future lost work wages
• Prescription drugs
• Travel to doctor’s appointments
• Physical therapy

Ensure that your client retains all receipts after their car accident. Your client’s insurance company may need to refer to this information to provide your client with a fair settlement. If your client can’t verify an expense, it will be extremely difficult for them to get reimbursed for that expense.

General damages, also called non-economic damages, are more challenging to estimate since they are subjective. Let’s say that a car accident results in painful bone fractures with years of therapy. Shouldn’t your client be compensated for the suffering that another person caused, even in the aftermath? Every state in America seems to think so.

An injury from an accident caused by someone else may limit your client from enjoying the activities in life they once loved. Say your client was an avid cyclist, for example, and had their ability to do so taken away due to an accident? How do you put a value on that loss?

• Lost enjoyment of life
• Physical pain and suffering
• Mental anguish
• Loss of consortium, or disruptions to familial relationships
• Loss of care and guidance, or the loss in the ability to properly care for a child or dependent
• Scarring and disfigurement

These damages are difficult to quantify and calculate. Some states even apply limitations, or damages caps, to limit how much you can collect. For example, California doesn’t limit the amount you can obtain, whereas Florida limits your general damages to $500,000.

Most insurance adjusters calculate general damages by plugging your client’s claim into software that tells them how much to offer. The insurance adjuster will also use their judgment to customize the outcome of your client’s claim.

The most important thing your client can do is to track all accident-related expenses and provide documentation to the insurance adjuster to recuperate them. Additionally, make sure that your client is also following their doctors’ advice to a “T.” Insurance companies can deny your client’s claim if they believe that your client’s injuries have been made worse by not following their doctor’s advice.

‍