When an accident occurs due to someone’s negligence, many people believe that their insurance company pays out the limit on their liability policy for injuries. Others believe that the insurance company only pays for the value of the medical expenses and property damage the victim incurred. In truth, there are many things that a personal injury claimant can seek compensation for, even things that don’t have a price tag.
The Type of Compensation You Can Receive
Individuals can seek to recover economic and non-economic damages through the personal injury claims process.
In plain English:
- Damages refer to a payment made in compensation for harm.
- Economic damages refer to compensation for your expenses for your injuries and property damage.
- Non-economic damages refer to compensation for the psychological effects of your injury or how it has affected your quality of life.
Examples of Economic Damages
Some of the expenses that individuals commonly seek to recover damages for through the personal injury claims process include:
- All expenses related to the medical treatment of the injury you sustained in the accident, including ambulance transport, emergency services, diagnostic imaging, surgery, prescription medication, the services of your doctor or surgeon, physical therapy, rehabilitation, the provision of assistive devices such as crutches or a wheelchair, home health services, or even long-term care.
- The loss of wages and other benefits when you were too injured to work.
- Loss of future earning capacity due to permanent injuries that render you unable to earn the same amount of income as before the accident.
- Property damage sustained in the accident, such as damage to your vehicle caused by a car accident or damage to your personal belongings if you experienced a house fire in a rental unit.
Examples of Non-Economic Damages
The types of psychological impacts personal injury claimants often seek compensation for include:
- Physical pain and suffering resulting from the injury, a complication, or treatment of the damage or complications. This is often proven through expert testimony from a medical professional familiar with the injury incurred and can speak to the amount of pain a person generally experiences and provide documentation of frequent treatments required for the injury.
- Emotional distress from trauma or the profound changes to the claimant’s life after experiencing the injury.
- Loss of consortium, which is compensation sought on behalf of the claimant’s spouse or romantic partner for the loss of physical intimacy that is often experienced due to severe injuries.
- Loss of the enjoyment of life if the injuries sustained have prevented the claimant from participating in endeavors they previously enjoyed.
The Potential of Punitive Damages
In addition to economic and non-economic damages, most states allow personal injury claimants to request punitive damages in certain circumstances. For example, in Pennsylvania, claimants are permitted to seek punitive damages if the accident resulted from someone’s gross negligence or extreme recklessness, intentional wrongdoing, or repeated or continued misconduct.
In Philadelphia, the most common cases that receive punitive damages include car accidents caused by drunk drivers, hit-and-run traffic accidents, medical malpractice, product liability, and dog bite claims.
In Florida, claimants seeking punitive damages must show that the defendant’s intentional misconduct or gross negligence caused the accident. Intentional misconduct refers to the defendant’s knowledge that their actions were wrongful, and there was a high probability of physical harm or property damage to others.
Gross negligence refers to conduct so reckless that it represents a conscious disregard or indifference to life, safety, and other people’s rights.
Punitive damages come through the court, and the court decides the amount. Some states place caps on punitive damages. Your lawyer can help explain your options and the likelihood that you can seek punitive damages.
Factors That Affect the Value of Your Claim
As you can see, determining the value of a personal injury claim isn’t as simple as demanding the limit on the at-fault party’s policy or adding up your medical bills. Several factors influence the value of your claim, including the following.
The Amount of Available Insurance
One of the first services a personal injury attorney provides is an accident investigation to determine all sources of liability and insurance. Because most individuals do not have the funds to pay for someone’s accident expenses out-of-pocket, liability insurance policies are responsible for compensating the vast majority of all personal injury claims.
Suppose the at-fault party is uninsured or there is not enough insurance available to provide the level of compensation you need for your injuries. In that case, it can negatively influence the value of your claim.
The Severity of Your Injuries
It stands to reason that a severe or catastrophic injury would increase the expenses involved in treatment. However, in addition to higher medical bills due to more extensive treatment or hospitalization, the severity of your injury affects the value of your claim in other ways.
Serious injuries are also more likely to
- result in:
- More days missed from work.
- Permanent injuries that will impair your ability to earn an income.
- Profound impacts such as increased pain and suffering or loss of consortium.
Specific injuries are considered catastrophic due to the high likelihood that the injury will result in permanent disabilities. This term most often applies to traumatic brain injuries or spinal cord injuries. Still, it can also refer to injuries such as amputated limbs or other severe damage to the spine.
The Income You Were Earning Before the Accident
The average earnings of a person in the months before they suffer an injury is important when seeking compensation through the personal injury claims process. The claimant can seek compensation for lost earnings and wage replacement for lost earning capacity. As a result, the claims of mid-career claimants are generally more than the claims of people who are too young to have a job or those who no longer earn an income.
The Clarity of Liability
Your attorney must show that your injury resulted from someone else's negligence to achieve a successful outcome. However, not every type of accident has just one source of liability. In fact, in many cases, the claimant was also partially liable for the accident that caused your injuries.
As long as you were not primarily responsible for the accident, you can file a claim and seek compensation. However, the claim's value decreases to reflect liability. Your lawyer can explain this process and how it changes the value of your claim.
Multiple Sources of Liability
While being partially liable can negatively impact the value of your claim, having more than one individual or entity with liability for the accident can positively affect the compensation you recover. Multiple sources of liability often mean various sources of insurance that are available to provide compensation.
The state's laws where the accident occurred will dictate how to handle liability. For example, Pennsylvania courts determine the percentage of liability each party bears and apportion damages based on that percentage.
Whether You Have an Attorney
One of the primary services an attorney can provide for your claim is protecting its value from the tactics of the insurance company's claims adjusters, who are in business to protect the bottom line of their company. To protect this bottom line, they often resort to tactics that take advantage of most people's lack of knowledge about making legal claims or valuing a case.
Some examples include:
- Offering a quick settlement to a claimant without an attorney before the claimant has had the opportunity to speak with an attorney or understand the claim’s value. It is impossible to know the totality of expenses at this stage, creating a dangerous situation for the victim. If the claimant accepts the settlement offer and later determines that it is not enough to fully compensate for their injury, they cannot go back and ask for more money.
- Asking an unrepresented claimant to release their entire medical history, which can then be pored over in search of pre-existing conditions that can reduce the value of a claim.
- Delaying their response to the claimant to push the claim past the statute of limitations. The statute of limitations is the statutory time limit written into state law for filing the claim in court. Although most personal injury claims are resolved through settlement, failing to file by the time limit will generally remove the claimant’s right to seek compensation through the courts if the at-fault party’s insurance provider fails to fairly compensate the claim. Unfortunately, if you no longer have the option of the court process, the insurance company will likely not settle the claim either because there is no legal recourse if they don’t.
An experienced personal injury lawyer knows when and how to value your claim, and the importance of providing other services to assist you in protecting your claim’s value, such as:
- Managing communication with the at-fault party’s insurer.
- Managing the deadline for your claim to ensure your right to the court process.
- Obtaining the evidence, expert testimony, and witness testimony to justify your claim's value.
- Help you understand the process and the value of your claim. The decisions about your claim are yours to make. Your attorney can negotiate for you and represent your case in court, but ultimately you decide whether a settlement offer is fair.
How the Claim Is Calculated
Your attorney will likely wait until you've reached maximum medical improvement before valuing your claim. This is when your physician determines that you have made the most improvement with your condition, even if treatment continues.
This is the best time to value the claim because you get a clearer picture of the expenses incurred treating the injury, the treatments you will likely need in the future, and whether the injury will affect your future earning capacity.
Here are the steps to valuing your claim:
- All the expenses you have incurred and the estimation of future costs will form your total amount of economic damages.
- Multiply your economic total damage by a number called a multiplier. The more severe your injuries are, the higher the multiplier. This new sum is the total amount of your non-economic damages.
- Add your economic damages and non-economic damages to determine the value of your claim.
If your attorney can prove the need for punitive damages and your case goes to court, they will request them. However, it is up to the court to determine how much to award. Only a portion of the awarded punitive damages goes to the claimant in some states, while a percentage goes to state treasuries.
Punitive damages are generally the only part of a personal injury award directly subject to tax from federal and state taxing authorities. The economic and non-economic damages you receive are not considered income and are not taxed.
If you’ve experienced an accident due to someone else’s negligence, your first step to seeking the maximum amount of compensation is speaking with an attorney about your claim.