Being involved in a vehicle accident is not fun. Sometimes it may take months or even years to recover from the aftereffects of the accidents. It also comes with a lot of expenses, like damage to your vehicle, medical bills, etc. But these economic losses are usually covered by insurance claims. But what about damages like emotional distress, pain, or suffering caused by the accident? How can they be compensated for? This is where non-economic damages come into play.
What are Non-Economic Damages?
The emotional damages or any pain or suffering caused to an individual due to an accident come under non-economic damages. Unlike economic damages, the non-economic damages focus on the emotional and psychological impact that the accident may have caused the victim.
Many victims don’t realize or are not aware of the fact that the law also allows them to file a claim and get compensation not only for the economic damages but also for the non-economic losses they are facing. This is why understanding why non-economic damages matter can help the victims fight for the right compensation. Here are a few common examples of non-economic damages:
- Pain and suffering: This includes the physical pain caused by injuries such as broken bones and post-surgery complications, and also the emotional distress it may cause.
- Emotional suffering: The stress, trauma, anxiety, depression, or PTSD that may be caused by an accident comes under non-economic damages.
- Loss of enjoyment: An accident may stop the injured person from participating in various activities they enjoy. This is considered a suffering caused by the loss of enjoyment.
- Loss of companionship: A loss of companionship is considered when the accident impacts the person’s relationship or involves the death of a loved one.
- Disfigurement or disability: When the accident causes a permanent disability or disfigurement that may affect the person’s abilities or cause shame to the individual.
Why Do Non-Economic Damages Matter?
Economic damages, such as damage to the vehicle, etc., are something that can be recovered from easily; it is the non-economic damages that have a long-term effect on the affected individual. Sometimes, it even permanently disfigures the person, leaves them with trauma, or prevents them from doing an activity that they used to love.
It is the non-economic damages that the real cost of the accident has caused to the person. For many, these damages are irreversible and have a lifelong impact on them, making it extremely important to ensure that such damages are also acknowledged and compensated.
How Are Non-Economic Damages Calculated?
Non-economic damages do not come with receipts or bills, which is why courts and insurance companies use two common methods to calculate the cost of the damage. They are:
- The Multiplier Method
In this method, the economic damages faced by the victim are multiplied by a number ranging from 1.5 to 5. The number multiplied will vary depending on the severity of the injury, with smaller injuries having a lower multiplier and severe injuries having a higher multiplier.
- The Per Diem Method
In this method, the victim’s pain is assigned a daily rate. The rate is then multiplied by the number of days the person is expected to suffer or until their condition improves and becomes close to normal.
Factors That May Influence Non-Economic Damages
The amount of compensation that you get from non-economic damages can be influenced by factors such as
- The severity of the injury: Severe cases, such as permanent disabilities or disfigurement, tend to get a higher amount as compensation.
- Impact on daily life: The impact of the injury on the person’s daily life, such as work, personal interests, and other activities.
- State laws: Each state has different laws. So the amount of compensation may differ depending on the state where the victim is from.
Final Thoughts
Non-economic damages play an important role in ensuring that victims actually get the right compensation they deserve and that their claim is not underestimated. By understanding how non-economic damage claims work, you can ensure that you are not downplayed by insurance companies.
