What Are Economic Damages?

Economic Losses Caused by an Accident

California law defines economic losses as “objectively verifiable monetary losses.” These can include:

• Out-of-pocket expenses
• Amounts billed to you that you need to pay
• Costs you will incur in the future with reasonable certainty
• Revenue or income that you did not receive

Let’s dive deeper into a few specific categories of economic damages:

Property Loss

In a car accident, your vehicle will suffer damage, and you will need to repair or replace it. You might also have damaged or lost personal property in the crash, like broken glasses and torn clothing.

Past and Future Medical Expenses

After the accident, you probably incurred at least some medical expenses for your injuries, including:

• Ambulance transportation
• Medical examinations
• Treatment and surgery
• Physical therapy
• Mental health counseling
• Medication

If you have health insurance, you might not have to bear 100% of these costs. But you probably paid copays or deductibles before your health insurer paid its share.

You may also have ongoing medical expenses. Physical therapy can take months or even years. And if you have mental or emotional trauma from your accident, you might need ongoing counseling and therapy. 

Catastrophic injuries like spinal cord injuries and brain injuries might even require round-the-clock nursing or assistance with breathing, eating, and moving.

Consequential Losses

You might have some losses that flow from the accident, even if they were not directly caused by the accident. Some examples include:

• Transportation due to damage to your car
• Travel for out-of-town medical appointments
• Domestic services like childcare, cooking, and cleaning while you recover

These losses usually count as economic losses from your accident if they are reasonable and necessary consequences of your accident.

Funeral Expenses

If you lost a loved one in the accident, their funeral and burial expenses count as economic damages. In California, you pursue these damages in a wrongful death claim against the person or business that caused your loved one’s death.

Income Losses

California recognizes a few types of income losses from an accident. Loss of earnings will include all of the wages, tips, salary, and revenue that you lose due to missing work. Your reason for missing work must relate to the accident. 

For example, you can probably include all earnings lost due to:

• Lack of transportation
• Doctor-ordered time off
• Medical appointments
• Travel for treatment or therapy
• Inability to perform job duties due to disability

If you lose your job due to your accident or injuries, you can claim 100% of the earnings you lost. But you do not need to miss work entirely to seek compensation for lost income. If your employer changes your job duties due to your injuries and you receive lower pay for the new duties, you can seek compensation for the difference in pay.

Another category of income losses includes the loss of business or job opportunities. A car salesman, for example, might claim lost sales commissions for the days the salesman was confined to a wheelchair and could not show cars in the car lot.