The Difference Between Economic and Non-Economic Damages


The primary purpose of filing a personal injury claim is to pursue and recover financial compensation from an at-fault party for a victim’s damages. This is intended to put the victim back into the position they were in before the accident, or to make them whole once again. But we all know this isn’t always possible. Sometimes, damages are more than just financial and a victim can never be the same after a serious accident. This is why several types of damages exist in accident law, and are awarded in successful personal injury cases.

But many people are confused about what the term “damages” represents in personal injury law. Continue reading to learn what damages are in relation to accident lawsuits, and the difference between economic and non-economic damages.

What are Damages?

Damages that result from a personal injury caused by a negligent party are generally losses. These losses can be financial, emotional, physical, and mental. Depending on the types of losses experienced following a personal injury, one’s damages will be either economic, non-economic, or both. Here is a brief overview of the differences between the two categories of damages, and examples of each:

Economic Damages

Economic damages are for tangible financial losses. Losses that can be defined by an actual dollar amount and redeemed through financial compensation are considered economic damages. Economic damages include hospital bills (i.e. hospitalization, ambulance transport, anesthesia, emergency room services, surgeries, doctor care, x-rays, MRI’s, etc.), medical expenses (i.e. physical therapy, medical equipment, medication, etc.) lost wages from time off work, property damages, lost benefits from spouses death (i.e. insurance, veterans benefits, etc.), in-home nurse, and anything else that was a direct financial loss to the victim or their family.

Non-Economic Damages

Non-economic damages are more difficult to assign a dollar amount to because they are not direct and tangible monetary losses, like medical bills and lost wages. Instead, they are damages awarded for emotional or mental losses and tribulations. Examples of non-economic losses include pain and suffering, mental anguish or illness (i.e. depression, anxiety, etc.), loss of companionship (i.e., wrongful death, brain damage to loved one, paralysis of loved one that changes or prohibits the relationship, etc.), long-term medical care or medication dependencies, diminished quality of life, permanent disabilities, loss of ability to work, and more.

For very malicious or egregious acts, a judge or jury might also award punitive damages depending on the circumstances of a case. These are different from economic and non-economic damages because they are not intended to put a victim back into the same position they were in before an injury or accident. Although punitive damages are still paid to the plaintiff, they are meant to be more of a punishment for the at-fault party. They are intended to set a public example and double as a deterrent for the particular negligence involved in the case.

Trust a Seasoned Accident Attorney

Call a reputable personal injury law firm for information and advice about a recent serious accident or injury you or a loved one may have experienced. You may be entitled to compensation for your economic and non-economic losses.

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