Personal Injury: I was injured in an accident. How are damages computed?

In a personal injury case, compensatory damages typically can cover all economic losses caused by the injury, including past and probable future medical expenses, loss of the earnings that you would have earned "but for" the injury, and, if the disability is permanent, the loss of future earnings through retirement. For children and persons without an earning history, courts often take into account probable earning capacity. In addition to economic loss, you may also be entitled to be compensated for non-economic losses, such as pain and suffering, emotional anguish, and loss of enjoyment of life.

Courts award damages in a single lump sum. The portion of the award that relates to potential future income and future medical expenses is often "discounted" to take into account the interest income that could be expected to be earned on the sum. Depending on the state you are in, the potential of future inflation, and the tax-free nature of compensatory damages may also be taken into account.