Economic damages

In plain English: economic damages are the losses from an accident that come with a price tag. Medical bills, lost wages, car repairs, travel to appointments and the cost of future treatment all fall into this group. In the UK and Canada you'll more often hear them called pecuniary losses or financial losses.

What falls under economic damages

• Medical costs: ambulance, emergency care, surgery, scans, physio, medication, therapy.
• Income: wages, overtime, bonuses, commission and self-employed profits you lost while recovering.
• Future earnings: if the injury means you'll earn less for years, or can't go back to your old job.
• Future care: ongoing treatment, home help, equipment, home adaptations.
• Property: vehicle repair or replacement, a broken phone, damaged clothing, a child seat.
• Everyday costs: mileage, parking, taxis, help with childcare or housework.

Why these are easier to prove, and still get cut

Because economic damages are based on bills and payslips, they look straightforward. They aren't always. Insurers commonly argue that a treatment wasn't necessary, that a therapy went on too long, that your time off work was longer than the injury justified, or that a charge was above the going rate. With future losses, the fight is over assumptions: how long you'd have worked, what promotions you'd have had, what care you'll really need.

The fix is paperwork that connects each cost to the accident. A doctor's note signing you off work, a referral that explains why physio was needed, and a letter from your employer confirming lost shifts all make a number harder to argue with.

Caps and deductions to know about

In the US, some states cap non-economic damages (like pain and suffering), but economic damages are usually uncapped, which is one reason careful records matter so much. Your total can still be reduced if you were partly at fault, under comparative negligence rules. In no-fault states and Canadian provinces with accident benefits schemes, some economic losses are paid first by your own insurer, and the at-fault driver's insurer won't pay those twice. In the UK, certain state benefits received because of the injury can be clawed back from your compensation through the Compensation Recovery Unit.

Start your records now

Keep a folder, paper or digital, for every receipt, bill, payslip and letter from the day of the accident. Note mileage to each appointment. It feels tedious, but the claim can only include what you can show.

Next: economic vs non-economic damages · out-of-pocket expenses · claim value workbook.

Related terms