What Are Noneconomic Damages?

The latest data collected from the Maryland Department of Transportation shows that in 2022 alone, there were 108,443 car crashes across the state. Not every one of those crashes resulted in trips to the ER or a courtroom. However, many of those victims who suffered serious harm were likely entitled to compensation for their economic and noneconomic damages.

The amount of damages victims are entitled to can vary quite a bit. Why? Actual costs and non-tangible losses are calculated differently.

When demanding compensation from an insurer after a car accident, your attorney calculates all your accident-related losses. Economic damages are actual costs you incurred. What are noneconomic damages, though? Below, we’ll further explain what different types of damages are and any caps that may apply to them.

Economic Versus Noneconomic Damages

Noneconomic damages are sometimes referred to as non-compensatory or non-pecuniary damages. Pecuniary is legalese for “relating to money.” One of the easiest ways to understand the difference between economic versus noneconomic damages is that one comes with a receipt.

Your economic damages can be all your current and future medical expenses. Those costs include:

• Surgical fees
• Medications
• Medical supplies and assistive devices
• Physical therapy
• Follow-up visits with your doctor

All the above-referenced expenses will have a bill you can present as proof of out-of-pocket losses.

Noneconomic damages are a type of intangible loss that a car accident victim has but that don’t have an attached value. Here are some examples of noneconomic damages:

• Pain and suffering: This refers to the level of emotional distress and physical pain an accident victim experiences.
• Loss of companionship: If the accident results in a death, the surviving partner can be impacted by the loss of a loved one.
• Loss of consortium: Recovering from a debilitating injury can manifest in a loss of marital benefits or intimacy.
• Disfigurement and scarring: An accident that leaves behind permanent scars or disfigurement can affect a person’s self-esteem.
• Loss of enjoyment of life: An injury from a car accident might prevent the victim from enjoying the same activities they engaged in before the collision.
• Mental anguish: This covers things like emotional distress, anxiety, and psychological suffering such as post-traumatic stress disorder (PTSD).

Personal Injury Compensation Caps

In Maryland, there are caps for noneconomic compensation. According to House Bill 862, presented during the Maryland General Assembly in 2023, the current cap is $935,000. It increases by $15,000 annually to cover inflation costs. This cap applies to car accidents and other types of personal injuries, such as slip-and-fall incidents and dog bites. That amount applies to a single beneficiary.

If the case involves a wrongful death stemming from a single incident, the cap is applied to each beneficiary. In other words, they would all get an equal amount up to the limit. There are no caps for economic damages, provided you have the correct documentation to prove your losses.

Calculating Non-Compensatory Damages

Because noneconomic damages do not automatically come with a receipt, the courts have developed two options for how attorneys and their clients can calculate those damages. You can utilize one of the following methods:

Multiplier Method

The multiplier method begins with the provable economic damages. For example, your injuries from a car accident might have triggered $100,000 in medical expenses. You can apply a multiplier in the range of one to five for your pain and suffering. Suppose you decide on a factor of three. That would mean you would ask for $300,000 for economic and noneconomic damages.

Per Diem Method

The per diem method applies a fixed amount of damages per day. For instance, you might have injured your back and experienced pain for 60 days. You can ask for a per diem of $200 per day. That would add $12,000 to your final settlement request.

No matter which approach you opt for, the noneconomic damages are different for everyone, and gathering proof of those damages can be challenging. You might start a daily pain journal that documents how you feel on a scale of one to 10. You can also document all the events and activities you can no longer participate in. For example, if you played in an adult softball or a bowling league and can no longer participate, you should make note of that.

It might also help to talk to a therapist about some of the mental health issues your car accident caused, such as depression, anxiety, and stress. You generally would not have to share the specific details of your sessions with an insurer. Still, the fact that you are regularly attending therapy can demonstrate your ongoing issues that started as a result of the accident.

The Importance of an Experienced Attorney

Even though there is a limit on the amount of noneconomic damages you might be awarded if you have a successful claim or lawsuit, working with an experienced car crash attorney in Baltimore is still essential.

At Belsky & Horowitz, LLC, we have negotiated successful outcomes for many of our clients and understand the limitations of car accident claims and lawsuits. We advocate for our clients and take up the negotiations on their behalf. Call to schedule a consultation to talk about what happened that caused your serious injuries, and we’ll advise you of the rights to take legal action that Maryland law affords you.