Types of Damages: A Breakdown of How Personal Injury Settlements are Determined

You’ve probably seen a headline that looks something like this in the news before: 

“Jury awards $50 million to a man injured in car wreck.”

But how is a settlement amount that large determined in the first place? Why do some people injured in car accidents receive millions of dollars in damages, while others are lucky to earn even a fraction of that amount?

Unfortunately, there is no such thing as a “one size fits all” formula that attorneys and insurance companies use to calculate the value of an injured plaintiff’s damages. However, experienced attorneys can usually determine a fair settlement value for their clients by adding up multiple types of damages, depending on the injuries their clients sustained. 

Generally, there are three types of damages that can be added into a total settlement for victims of personal injury.

1. Special (Economic) Damages

Special damages make up the total amount of money that you or your family already lost (or will continue to lose) as a result of the injury. These damages are considered to be “special” because they are unique to the individual plaintiffs involved in each case.

There are many different expenses that can be added into special damages, including but not limited to:

  • Current (and future) medical bills

  • Cost of rehabilitation therapy

  • The value of job earnings lost

  • The reduced value of future earnings caused by disability or permanent injury

  • Vehicle repairs and other property damage
  • Cost of the ambulance ride 

  • Cost of tow truck service for your vehicle

  • Rental car fees while your car is repaired

  • Wages for a household caretaker needed because of your injury
2. General (Non-Economic) Damages

General damages are designed to compensate you or your family for any pain and suffering that you may have gone through (or will continue to go through) because of the injury. These damages do not include monetary damages like medical bills or car repairs. Instead, your attorney will help you determine an estimate that accurately reflects the loss you or your family has endured.

  • Chronic pain or discomfort

  • Suffering caused by traumatic medical care

  • Permanent disfigurement or impairment (missing limb, inability to walk, etc.)

  • Loss of autonomy (having to rely on others to take care of you)
  • Mental trauma (PTSD, anxiety, etc.)

  • Emotional distress (death of a loved one)

  • Reduced quality of life (inability to continue hobbies or activities)

  • Loss of consortium (the loss of emotional & intimate needs from a deceased spouse)
3. Punitive Damages

Finally, punitive damages can also sometimes be included in cases where the party responsible for the injury acted in a way that was outrageously negligent or reckless. These damages are specifically designed to punish the at-fault party, and they are still factored into the plaintiff’s total settlement even though they have nothing to do with compensating the victim for their injuries.

Here are some actions and behaviors that are often considered for punitive damages:

  • Gross negligence (a complete disregard for the safety of others)

  • Intent to cause harm, e.g. assault or battery

  • Defamation against the plaintiff
  • Intent to deceive the plaintiff or purposely misrepresent a product, diagnosis, etc.

  • Violation of the plaintiff’s rights

IMPORTANT NOTE: Washington state, Nebraska, Louisiana, Massachusetts, and Rhode Island all have state laws that either ban punitive damages altogether or greatly restrict a plaintiff’s ability to receive punitive damages. 

A handful of other states have also placed limits on how much money a plaintiff can legally earn in punitive damages. Be sure to check for any restrictions on punitive damages in your state before filing a personal injury lawsuit.

Did you or an immediate family member get injured in a car crash, medical procedure, or other kind of accident involving another party? Let our team help you fight for fair compensation— see if you qualify for a free case review today.