What Are Economic Damages And What Do They Cover? (2025)

What Are Economic Damages?

Often, people who file personal injury lawsuits are pushed to do so because of financial strain. The cost of emergency and ongoing medical care can add up quickly. Many injuries make it impossible to work, and that may compound financial issues.

If they win their lawsuits, injured people will receive compensation to make up for these losses. That compensation is known as “economic damages.”

What Economic Damages Cover

Economic damages cover all financial costs associated with the other person’s actions. Economic damages are unique to your case because no one will incur exactly the same financial costs, even if they experienced the same harm.

The expense must be reasonable, necessary, and caused by the other party’s actions. The term “reasonable” means the amount was within the range expected under the circumstances.

“Necessary” refers to the connection between your injuries and your needs. For example, missing four weeks of work after a trip and fall accident might not have been necessary if your doctor had only cleared you to miss a few days.

Causation means there must be a factual connection between the loss and the other person’s actions. Thus, a lawyer might be able to connect truck accidents and bills for PTSD counseling. However, you will probably not be able to connect a breach of contract to a need for PTSD counseling.

Economic Damages Examples

Life-altering injuries often come with staggering financial costs. These are some of the losses you might be able to recover economic damages for.

Medical Expenses

Often, a large portion of accident compensation is meant to cover your medical expenses. That includes your past and present medical bills, but it might also include anticipated future medical expenses.

Some injuries require ongoing medical management — and that management can be costly. For instance, the average lifetime treatment cost of a traumatic brain injury (TBI) is more than $100,000. Severe TBIs can cost more than $1 million over the injured person’s lifetime.

To secure compensation for future medical expenses, your lawyer must reasonably prove the cost of managing your injury. Typically, lawyers use expert testimony to illustrate long-term medical costs.

Lost Income

In nearly every case, major injuries make it impossible to work — at least for a period of time. You might be able to recover economic damages to pay for your lost income. To prove the income you lost, your lawyer will likely use pay stubs or other records of your income before your injury.

Lost Earning Potential

Sometimes, your injury might be expected to heal completely, allowing you to return to the job you held before your accident. However, if that’s not the case and your lawyer can show that your long-term earning capacity has been limited, you may be able to recover compensation.

For example, imagine you held a job in construction before suffering a permanent back injury in a car accident. You made $60,000 per year. Your injury is severe enough that you won’t be able to work in construction anymore, so you take a job working at the front desk of your construction company. This job pays $30,000 per year.

In this instance, you might be compensated the difference between these two salaries for each remaining year of your working life. If the court estimates you have 10 more working years, you might be compensated $300,000 for your loss of earning potential.

Transportation Expenses

After your injury, you likely will need to attend countless follow-up medical appointments. If your injury makes it impossible for you to drive, you may have to cover the cost of a rideshare or taxi to and from your appointments.

Cost of In-Home Care

After you leave the hospital, you might require the help of an in-home nurse or other caregiver. That expense could be factored into your economic damages.

Cost to Modify Your Home

If you suffer a permanent injury that results in a disability, you may need to modify your home. For example, if you are confined to a wheelchair, you may need to add a stair lift and ramp to your house.

This isn't an exhaustive list of all possible economic damages. Personal injury lawyers can discuss your case and determine whether you qualify for additional compensation.

Economic Damages vs. Non-Economic Damages

Many people don’t understand the difference in general damages vs. special damages. These are alternate terms for non-economic and economic damages:

• General Damages: Non-economic damages, or compensation for intangible losses
• Special Damages: Economic damages, or compensation for losses with a monetary value

Calculating economic damages is often relatively straightforward. However, because it requires you to assign a dollar value to intangible losses like pain and suffering, calculating non-economic damages poses unique challenges.

Personal injury lawyers have extensive experience with valuing cases. If an attorney takes your case, they will be able to estimate how much you may recover in economic damages and non-economic damages.

How to Prove Economic Damages

You will prove past economic losses using financial records, such as the following:

• Receipts
• Medical bills
• Bank and credit card statements
• Insurance statements showing copays and out-of-pocket payments
• Pay stubs and wage records

These documents will describe how much you paid and the reason for the payment.

You can also seek economic damages for future expenses, such as reasonably foreseeable medical treatments you may need. You may use expert testimony to explain what you will need and how much it will cost.

Similarly, you might need expert witnesses to explain the future impact of the other party’s actions on your income.

Thus, suppose you win a lawsuit against someone for damaging your property. Your economic losses will include the impairment in your property’s value over its useful lifetime. An accountant or financial expert may testify about its prior value and its value after being damaged.

When Can You Recover Economic Damages?

If you file a car accident lawsuit or another kind of personal injury lawsuit, your lawyer will try to recover economic damages on your behalf. However, to win your case and recover compensation, your lawyer must prove the elements of negligence:

• The at-fault party owed you a duty of care
• They didn’t fulfill that duty
• Their breach of duty caused your injuries
• Because of your injuries, you have damages to collect

Your lawyer will need to show reasonable proof of your economic damages as well. They may use copies of your medical bills, receipts for medications, and documentation of your lost wages to prove losses. In some cases, they may even call in economic experts or other expert witnesses to offer supporting testimony.

What Happens if You Were Partially at Fault?

When you pursue a negligence claim against another party, they may defend themselves by claiming that you shared the blame for the accident. In some states, this defense completely ends your claim. These states use a doctrine called contributory negligence. Under this doctrine, you cannot recover anything if you were even 1% at fault.

Most states use a different doctrine called comparative fault. Florida is one of the states that has a comparative fault statute.

Under this doctrine, the factfinder allocates fault between the parties. For example, you might be found 30% at fault, and the other party might be 70% at fault. The court then uses these percentages to determine the proportion of your economic losses for which you can be compensated.

Thus, if you were only found to be 30% at fault for your accident, you can still recover 70% of your economic losses in a lawsuit or insurance claim.

Have You Been Hurt Because of Someone Else’s Negligence?

Some accidents are just that — accidents. However, if someone else’s reckless or negligent behavior caused the accident that led to your injuries, you shouldn’t have to handle the financial fallout alone.

The right personal injury attorney may be able to help you recover economic damages to compensate you for your medical expenses, lost wages, and other losses.

If you’ve already started looking for a lawyer, you’ve likely seen that you have no shortage of options. Dealing with major injuries is overwhelming enough, and the stress of searching for an attorney may prove to be too much.

That’s where ConsumerShield comes in. We focus on helping people like you find attorneys who meet their needs. Are you ready to get started? Fill out our form below for a free case review!