Posted On December 17, 2012 Accident Tips & Prevention

Damages: Breaking Down a Personal Injury Settlement

The numbers involved in a personal injury settlement can be flashy and make for attention-grabbing headlines when they reach into the millions of dollars. Commenters on news stories decry them, screaming how these so-called victims are probably just faking it or the amount awarded looks more like a handsome inheritance than compensation for injuries. Determining the level of ‘damages,’ as we attorneys call them, in accident-related matters is actually a complicated process. The formula involved depends on a number of predetermined factors and is never simply a roll of the dice or a winning set of lottery numbers. A closer look at what goes into a personal injury settlement may help calm fears, and shed light on just what claimants take home once the courtroom dust settles.

Compensatory Damages

In the simplest terms, compensatory damages relate to costs incurred by a claimant due to harm visited upon them by another party’s negligence. By law, it’s not the claimant’s responsibility to avoid hazards at a business or ‘try not to get hit’ while out driving. It’s the duty of business owners to provide safe environments just as it’s the duty of other drivers to operate their vehicles safely. If all we had to do was ‘watch where we’re going,’ what’s to stop a business owner from letting his floors degrade and electrical wiring become dangerously frayed? Here’s a breakdown of what an injured claimant could expect to receive in compensatory damages:

• Lost Wages – If a claimant is unable to work due to their injuries, they may be able to recoup wages they lost during the time of their recovery and future wages they may have to forfeit if they can no longer continue in their chosen profession.
• Property Damage – Destruction of personal property, an automobile, for example, has a quantifiable cost that can be included as compensatory damages. An injured claimant has the right to recoup that cost to purchase another automobile after a crash.
• Medical Expenses – Insurance usually handles medical expenses incurred in an accident up to preset policy maximum. When costs exceed policy limits, an injured claimant may be on the hook for the remainder. Seeking compensation for those outstanding medical costs can mean the difference between full financial recovery after an accident and bankruptcy court.

The World of Punitive Damages

Punitive damages are the side of the personal injury settlement that can inflate an award and rocket it onto the front page of news sites. When attorneys say ‘punitive’ we mean the damages awarded to an injured claimant as a punishment against the negligent party. Many states, including Pennsylvania, have legislative caps on punitive damages that effectively limit the financial liability of businesses, insurance companies, and other liable parties when people suffer injuries because of their failures to provide care or conduct themselves in a safe manner. Punitive damages are important for the protection of consumers because:

• Real Financial Deterrents – Without the fear of punitive damages, there’s little incentive for businesses and insurance companies to take steps to promote safety or operate within the law. The insurance industry, in particular, brings in trillions of dollars annually and can easily absorb compensatory damages as costs of doing business. Punitive damages add teeth to settlements that make companies think twice about behaving badly.
• Punitive Damages are not Candy – Not every personal injury settlement warrants punitive damages or a massive settlement award. Punitive damages are usually only awarded in cases where clear bad faith or illegal practices are evident.
• Pain and Suffering – Punitive damages are useful to compensate victims for damages that are not easily quantifiable, including pain they may be dealing with after an accident or the loss of a loved one’s counsel in the aftermath of a fatal car crash.

If you’ve been hurt in an accident, you don’t care about the statutes or relevant case law, you just want help.  Our attorneys have worked since 1994 to obtain maximum compensation for our clients, helping more than 5,000 injured claimants get back on the road to recovery. Call us today for a free consultation. We’ll explain your rights and options going forward – all with no upfront fee for service.