How Personal Injury Settlements Are Calculated

While state laws will influence how a personal injury settlement is calculated, they all start by adding up all the associated expenses (or damages), which are typically organized into the following categories:

Economic Damages

Economic damages are quantifiable monetary losses resulting from the injury. These are calculated by adding up all the expenses associated with your accident.

Common economic damages include:

Medical Expenses: The total cost of medical treatment, including hospital bills, doctor visits, physical therapy, and future medical costs. For example, a hospital stay and surgery expenses.
Lost Wages: Compensation for income lost due to the inability to work during recovery, as well as future earning potential if the injury results in long-term disability. For example, wages lost during a three-month recovery period.
Property Damage: Costs to repair or replace any property damaged in the incident, such as a vehicle in a car accident.

Non-Economic Damages

Non-economic damages are subjective, non-monetary losses experienced by the plaintiff.

Common non-economic damages include:

Pain and Suffering: Compensation for physical pain and emotional distress. For example, chronic pain and mental anguish resulting from a severe injury.
Loss of Enjoyment of Life: Compensation for the inability to enjoy daily activities and hobbies. For example, no longer being able to participate in a favorite sport.
Emotional Distress: Compensation for psychological impact, such as anxiety or depression. For example, developing PTSD after a traumatic accident.

Calculating non-economic damages can be more complicated. Calculation methods can vary state-by-state, depending on legal precedents set by past case results, and consider many other factors like the severity of the injury and the plaintiff’s circumstances (age, occupation, overall health, etc.). Ask your lawyer about how non-economic damages are calculated and they should be able to provide an answer that applies to your unique case.

Get Your FREE Case Review

Examples of State-Specific Influences on Settlement Calculations

Tennessee

Key Influences on Settlement Calculations:

Comparative Fault: Tennessee follows a modified comparative fault rule, where the plaintiff can recover damages only if they are less than 50% at fault for the injury. The compensation is reduced by the plaintiff’s percentage of fault.
Caps on Non-Economic Damages: Tennessee has a cap on non-economic damages, such as pain and suffering, at $750,000 per injured plaintiff. In cases of catastrophic injuries, this cap increases to $1,000,000.

Wisconsin

Key Influences on Settlement Calculations:

Comparative Negligence: Wisconsin uses a modified comparative negligence rule, allowing plaintiffs to recover damages if they are 50% or less at fault. The compensation is reduced by the plaintiff’s percentage of fault.
Caps on Damages: Wisconsin has a cap of $750,000 on non-economic damages in medical malpractice cases. For other personal injury cases, there are no caps on non-economic damages.

Virginia

Key Influences on Settlement Calculations:

Contributory Negligence: Virginia follows a contributory negligence rule, where any fault on the part of the plaintiff can bar them from recovering any damages.
Caps on Damages: Virginia imposes a cap on non-economic damages in medical malpractice cases at $2,450,000, but there are no caps for other personal injury claims.

Arizona

Key Influences on Settlement Calculations:

Pure Comparative Negligence: Arizona follows a pure comparative negligence rule, allowing plaintiffs to recover damages even if they are 99% at fault. The compensation is reduced by the plaintiff’s percentage of fault.
No Caps on Damages: Arizona does not impose caps on non-economic or punitive damages in personal injury cases.

These examples are only for the states that we serve. Each state’s laws can significantly influence the outcome of a personal injury settlement. Understanding these nuances for your state is necessary for understanding how your compensation will be calculated.