Economic Damages Calculator
Estimate the total economic damages from an injury or wrongful act by quantifying past, future, and property-related financial losses.
Calculation Summary
What Are Economic Damages?
Economic damages, also known as special damages, represent the tangible and quantifiable financial losses a person has suffered due to an injury or wrongful act by another party. Unlike non-economic damages (such as pain and suffering), economic damages can be calculated with a reasonable degree of certainty by adding up past and future financial losses. These damages are intended to restore the injured party to the financial position they would have been in had the incident not occurred.
Key Components of Economic Damages
Our calculator considers the most common factors used in determining a total economic loss award. Here is a breakdown of each component:
- Past Lost Wages: This is the verifiable income you lost from the time of the injury until the present. It includes salary, bonuses, commissions, and any other earnings you were unable to receive because you could not work.
- Past Medical Expenses: This includes all medical bills incurred as a direct result of the injury. This covers everything from ambulance rides and hospital stays to surgeries, physical therapy, prescription medications, and doctor's visits.
- Future Lost Earning Capacity: This is the money you are reasonably certain to lose in the future because the injury has diminished your ability to earn an income. It's not just a simple multiplication of annual salary by years. We must calculate its present value.
- Future Medical Expenses: This is an estimation of the cost of all necessary medical care you will need for the rest of your life due to the injury. This can include ongoing physical therapy, future surgeries, long-term care, and prescription drugs.
- The Discount Rate: This is a crucial concept for calculating future losses. A dollar today is worth more than a dollar in the future due to inflation and potential investment returns. The discount rate (typically 1-3%) is used to reduce future losses to their "present value," which is the lump sum amount that, if invested today, would cover all those future losses.
- Property Damage: This is the cost to repair or replace any personal property that was damaged in the incident, such as a vehicle, a phone, or clothing.
- Other Out-of-Pocket Expenses: This is a catch-all category for any other expenses you incurred because of the injury, such as transportation costs to medical appointments, home modification costs (like a wheelchair ramp), or hiring help for household chores.
How to Use the Economic Damages Calculator
To get an estimate, simply fill in the fields with the most accurate figures you have available. If a category does not apply to your situation, you can leave it blank or enter '0'.
- Enter Past Losses: Input your total lost wages and medical bills to date.
- Estimate Future Losses: Provide your estimated annual income loss and the number of years you expect this loss to continue. Enter the total estimated cost of all future medical care.
- Input the Discount Rate: Use a standard rate between 1% and 3% unless advised otherwise by a financial expert. This rate accounts for the time value of money.
- Add Property & Other Costs: Include the value of any damaged property and other miscellaneous expenses.
- Calculate: Click the "Calculate Total Damages" button to see a detailed breakdown of your estimated economic losses.
Example Calculation
Let's consider a scenario: A 40-year-old electrician is injured in a car accident and can no longer perform their job. They plan to work until age 65.
- Past Lost Wages: $30,000
- Past Medical Expenses: $50,000
- Estimated Annual Income Loss: $70,000
- Number of Years of Future Loss: 25 (from age 40 to 65)
- Discount Rate: 2%
- Future Medical Expenses: $150,000 (for ongoing physical therapy and potential future surgery)
- Property Damage: $12,000 (for their damaged work truck)
- Other Out-of-Pocket Expenses: $3,000
Based on these inputs, the calculator would first determine the present value of the future lost earnings ($70,000 per year for 25 years at a 2% discount rate), which is approximately $1,365,685. It then adds all the components together to arrive at a total estimated economic damage figure.
Disclaimer: This calculator is for educational and informational purposes only. It provides a simplified estimate and should not be considered legal or financial advice. The calculation of economic damages in a real legal case is a complex process that requires a detailed analysis by a qualified forensic economist or legal professional. The specific laws of your jurisdiction may also impact the final calculation.