Understanding Economic and Non-Economic Damages in Texas

If you have been injured in a car crash, slip and fall, or other serious accident in Texas, you may be entitled to financial compensation through a personal injury claim. The two main categories of compensation are economic and non-economic damages.

What Are Economic Damages?

Economic damages are the measurable financial losses you incur because of an accident. These damages are often supported by bills, receipts, employment records, and expert testimony. They aim to restore the injured person to the financial position they were in before the injury occurred. Common types of economic damages include:

• Medical Expenses: Emergency room visits, surgery, hospitalization, physical therapy, prescription medications, and ongoing care.
• Lost Wages: Income lost due to missing work during recovery.
• Loss of Earning Capacity: When injuries prevent you from returning to your previous job or reduce your future ability to earn a living.
• Property Damage: Costs to repair or replace personal property, such as a damaged vehicle or destroyed belongings.
• Out-of-Pocket Expenses: These can include transportation to medical appointments, home modifications, in-home care, or assistive devices like crutches or wheelchairs.

Economic damages are typically straightforward to calculate, especially with thorough documentation.

What Are Non-Economic Damages?

Non-economic damages refer to the intangible losses suffered as a result of an injury. These do not have a clear dollar value, but they can significantly impact your quality of life. Because they are more subjective, insurance companies often dispute them, or try to minimize their value. Examples of non-economic damages in Texas include:

• Pain and Suffering: Physical pain and discomfort resulting from the injury, including chronic pain or long-term health complications.
• Emotional Distress: Psychological harm such as anxiety, depression, fear, trauma, or PTSD caused by the incident or injuries.
• Loss of Enjoyment of Life: Inability to engage in activities, hobbies, or social interactions you enjoyed prior to the injury.
• Disfigurement or Physical Impairment: Visible scarring or permanent disability that alters your appearance or bodily function.
• Loss of Consortium: In wrongful death or severe injury cases, family members may claim loss of companionship, affection, or support.

While harder to quantify, non-economic damages can be just as important as economic ones, especially in cases involving long-term injury or emotional trauma.

How Are Non-Economic Damages Calculated?

Under Texas law, there is no set formula required by law, so insurance companies, attorneys, and courts use various methods to estimate fair compensation. Two of the most common approaches include:

Multiplier Method

This method multiplies the total economic damages (such as medical bills and lost wages) by a number between 1.5 and 5, depending on the severity of the injury. For example, if you incurred $50,000 in economic damages and the case warrants a multiplier of 3, non-economic damages may be valued at $150,000.

Per Diem Method

This assigns a daily dollar value to the pain and suffering you experience and multiplies it by the number of days you are expected to be impacted. For example, if your suffering is valued at $200 per day and you are affected for 180 days, the total would be $36,000.

Is There a Limit on Damages in Texas?

Texas does not cap economic damages in most personal injury cases. Only non-economic damages in medical malpractice claims are capped at:

• $250,000 per claimant against a single healthcare provider
• $500,000 total if multiple healthcare institutions are involved

There are no such caps for general negligence claims like car accidents or slip and falls.