Are you wondering what non-pecuniary damages are? If you are injured in an accident caused by another person, you may be able to recover damages from the at-fault party. The primary purpose of the compensation is to put you back in the position you would be in had the accident never happened.
It means that you can recover compensation for both pecuniary (economic) and non-pecuniary (non-economic) damages. But what are these two types of losses? And how do they differ from each other? Let us find out.
What Are Pecuniary Losses?
Pecuniary losses are economic losses that have a specific monetary value attached to them. In other words, these are the out-of-pocket expenses you have incurred or will incur in the future as a result of the accident. Typically, pecuniary losses include:
- Medical bills
- Lost wages, if you are unable to work or are working reduced hours
- Loss of future earning potential due to disability or impairment
- Other expenses such as transportation costs related to medical treatment and recovery
- Car repair costs
- Emergency room bill
- Rehabilitation expenses
- Nursing home care costs
- Physical therapy bills
Basically, any expense directly linked to the accident and is quantifiable in monetary terms can be categorized as a pecuniary loss.
How Are Pecuniary Damages Calculated?
It is relatively easy to calculate your pecuniary damages as they usually consist of bills, receipts, and other documentation. You can use this documentation to calculate your actual losses by adding up the expenses associated with each type of loss.
For instance, if you have medical bills totalling $5,000, lost wages of $2,000, and car repair expenses of $1,000, your total pecuniary damages would be $8,000.
Your personal injury lawyer will typically request copies of your bills, receipts, and documentation to calculate your pecuniary damages. Therefore, it is critical to keep all records and documentation pertaining to the accident, injury, and recovery.
What Are Non-Pecuniary Losses?
Non-pecuniary losses are more difficult to quantify as they do not have a specific monetary value attached to them. These are the losses that do not have a direct financial impact but have significantly impacted your life. Non-pecuniary losses include:
Pain and suffering
Emotional distress or trauma
Permanent impairment and disfigurement
Loss of enjoyment in life activities such as hobbies, sports, socializing, etc.
Impaired relationships if your relationship with friends, family, and workmates deteriorate as a direct result of the accident.
In some instances, non-pecuniary damages may be awarded on top of pecuniary damages to compensate for the additional harm suffered.
How Are Non-Pecuniary Damages Calculated?
Unlike pecuniary damages, non-pecuniary losses do not have a specific monetary value attached to them. Therefore, it is difficult to calculate the exact amount of compensation for these types of losses.
Typically, insurance companies use a multiplier method to calculate non-pecuniary damages. Under this method, the victim’s total pecuniary damages are multiplied by a factor of 1.5 to 5, depending on the severity of the injuries suffered.
For instance, if the victim has sustained severe injuries that have resulted in a long-term disability, a multiplier of 5 may be used. However, if you only sustained minor injuries, a multiplier of 1.5 may be used.
So, if you sustained damages totalling $10,000, and a multiplier of 3 is used, you would be eligible to receive $30,000 for your non-pecuniary losses (that is 3*10,000).
Calculating non-pecuniary damages
It is important to note that the insurance company will not simply multiply your total pecuniary damages by a number.
The adjuster will first consider the severity of your injuries, the impact on your life, and the length of your recovery time. A multiplier will be applied to your total damages based on this information.
In some cases, the court may also consider the following factors when calculating non-pecuniary damages:
The victim’s age: Typically, younger victims are awarded higher compensation as they have a longer life expectancy and will therefore suffer from the injuries for a longer period.
The victim’s contribution to the accident: If the victim contributed to the accident in some way, this might be considered when determining your non-pecuniary losses. For instance, if you were found partly at fault for an accident that resulted in your injuries, your compensation may be reduced accordingly.
The victim’s pre-existing medical conditions: If you had a pre-existing medical condition that was aggravated by the accident, this might be considered when determining your damages.
In some cases, state laws cap non-pecuniary damages, depending on the nature of the injury and details of the accident.
How to Pursue Pecuniary and Non-Pecuniary Damages After an Accident
If you have been injured in an accident caused by someone else’s negligence or wrongdoing, you may be eligible to file a claim or lawsuit for economic and non-economic damages.
To pursue compensation, you will need to work with an experienced personal injury lawyer who can help gather evidence, identify liable parties, and aggressively advocate on your behalf.
Your attorney can also explain the laws in your state that govern the maximum amount of damages you can recover. They will also assess the severity of your injuries to determine the actual value of your claim.
Summary
Pecuniary and non-pecuniary damages are both types of losses that can be suffered after an accident. However, there is a big difference between the two.
Pecuniary damages can be easily calculated and awarded in a court of law. Non-pecuniary damages, on the other hand, are more difficult to calculate and often require expert testimony.
If you have been injured in an accident, it is crucial to understand the differences between these two types of damages so that you can pursue the appropriate type of compensation.
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