How Are Damages Assessed in a Personal Injury Claim?

When you suffer harm because of another person’s actions or negligence, a personal injury claim can help you recover compensation for the losses you’ve experienced.

Unfortunately, reaching a settlement or financial award isn’t as simple as just naming an amount and demanding payment. Determining total damages involves the detailed evaluation of the harm caused, the evidence that supports that harm, and the legal principles that apply.

Whether the injury arose from a car accident, slip and fall, workplace incident, or medical error, understanding how damages are assessed can help injured individuals know what to expect.

What Are Damages in a Personal Injury Claim?

Damages are the monetary value assigned to the harm suffered by the injured party. They’re designed to put the injured person as close as possible to the position they would have been in had the injury not occurred. This means compensating not only for immediate financial losses, but also for ongoing effects and intangible harms.

Personal injury awards are typically divided into two types: compensatory damages, which aim to cover actual losses, and, in rare cases, punitive damages, which punish especially reckless or malicious conduct.

Within this compensation category, there are economic and non-economic damages, and each is assessed differently.

Economic Damages

Economic damages include the measurable, out-of-pocket costs linked to the injury. These are typically simpler to calculate as they involve concrete numbers supported by bills, receipts, and financial records.

Medical costs often make up the largest portion of economic damages. They can include costs for emergency care, hospital stays, surgery, physical therapy, prescription medication, and ongoing treatment. If the injury is severe or permanent, future medical costs are also factored in.

Lost wages are another major element. If an injury forces the person to miss work or reduces their ability to earn in the future, the value of those lost or reduced earnings is included. For long-term or permanent disability, vocational experts may estimate the individual’s lifetime earning capacity.

Property damage also falls under economic damages. For example, in a car accident claim, the cost to make repairs or to replace a damaged vehicle is calculated and included as part of the settlement demand.

Non-Economic Damages

Non-economic damages are less straightforward. They account for the real but harder-to-measure impacts of an injury, such as any pain and suffering you’ve experienced, your emotional trauma, loss of enjoyment of life, or the strain on your personal relationships.

Unlike economic damages, there is no universal formula for assigning a dollar amount to non-economic losses. Attorneys, insurance adjusters, and juries may use various methods, such as the multiplier method, in which financial damages are multiplied by a number that reflects the severity of your injury.

Another method is the per diem approach, assigning a daily value to the suffering and multiplying it by the number of days the victim is expected to endure the effects.

The subjective nature of these types of damages means they’re often the most contested part of an injury claim. Strong evidence, including medical records, mental health evaluations, testimony from friends and family, and personal journals, can help establish the depth of the harm.

Factors That Influence Damage Assessment

There are several factors that can shape how damages are calculated and whether you (the victim) receive full compensation.

These can include:

• The severity and permanence of the injury
• The injured person’s age, health, and earning capacity before the accident
• The credibility and clarity of medical documentation
• Evidence of fault and/or negligence
• The skill and experience of the attorneys involved

Local laws can also significantly affect the final award. Some states place caps on non-economic damages, especially in medical malpractice cases. Comparative fault rules can reduce damages if it’s determined that you share some responsibility for the accident.

Evidence and Documentation

Assessing total damages requires proof. Medical records are often the foundation, providing a timeline of treatment, diagnoses, and prognosis. Related non-medical bills, pay stubs, and tax returns also help to establish financial losses. Expert witnesses, such as doctors, economists, and vocational rehabilitation specialists, often provide testimony that strengthens a damages claim.

Personal documentation can also play a role. Injured individuals who keep a detailed record of their daily struggles, pain levels, and emotional state create a compelling narrative of their suffering.

This humanizes the claim and can help a judge or jury understand the true impact of the injury.

How Do Insurance Companies Approach Damage Assessment?

Insurance adjusters typically start with a liability review to determine if the insured party is actually responsible for the accident. Once this liability is accepted, they’ll move on to damage evaluation.

Adjusters often rely on software to calculate settlement ranges, especially for economic damages.

However, these programs may undervalue non-economic damages because they rely on standardized inputs. This is one reason why many personal injury claims result in settlement negotiations between attorneys and insurers rather than quick payouts. An experienced lawyer will present evidence in a way that highlights the full extent of harm, challenging lowball offers from insurers.

The Negotiation Process

Once damages have been calculated, both sides begin negotiating. The injured party’s attorney typically starts with a demand letter outlining the incident, liability, damages, and a proposed settlement amount.

The insurer responds with an offer, often much lower than the demand. Negotiations will typically continue until both sides agree on a number or decide to go to trial. During these discussions, the quality and organization of evidence matter.

A claim supported by clear, persuasive documentation has a much better chance of reaching a settlement that’s fair for all parties.

When Cases Go to Trial

If a settlement can’t be reached, going to trial allows a judge or jury to determine what the appropriate damages should be. This process can be lengthy and unpredictable. While some cases result in higher awards than the settlement offers, others end with lower amounts or even no compensation if liability can’t be proven.

At trial, both sides present evidence and call witnesses. Your side will focus on showing the full extent of your damages, often through expert testimony and emotional narratives. The defense may challenge the severity of your injuries or argue that other factors contributed to your losses.

Steps to Strengthen a Damages Claim

Injured individuals can take practical steps to help ensure damages are assessed fairly:

• Seek medical treatment immediately and follow all recommended care
• Keep detailed records of all of your related expenses and losses
• Maintain a daily log of your pain, symptoms, and limitations
• Avoid making statements to insurers without legal advice
• Consult with an attorney who has experience in personal injury law

These steps help build a solid foundation for and add value to your claim.

The Importance of Having Legal Representation

While it is possible to handle a personal injury claim without an attorney, having skilled legal representation can make a significant difference.

Lawyers understand how damages are calculated and can anticipate the tactics that many insurance companies use to reduce payouts. They also know how to gather evidence, work with experts, and present a case effectively in negotiations or at trial.

Your attorney can also help you navigate legal complexities that may affect your damages, such as comparative fault, damage caps, and your local statutes of limitations. For serious injuries or cases involving long-term disability, professional representation often leads to a more accurate and fair damage assessment.

Hendrickson & Long, PLLC, Can Help

Assessing damages in a personal injury claim is a complex process that goes far beyond just adding up bills and receipts. It requires careful evaluation of both tangible and intangible losses, consideration of future needs, and a realistic understanding of how the injury has changed the person’s life.

The combination of solid evidence, knowledgeable legal guidance, and strategic negotiation can make all the difference between getting a low settlement and achieving maximum compensation.

In the end, damages are not just about numbers—they’re about recognizing the full scope of what was lost and ensuring that recovery is possible, both financially and personally.