When seeking compensation in a personal injury lawsuit, a plaintiff needs to request a specific amount of financial relief in most cases. Those filing a lawsuit, therefore, need to understand both the immediate and long-term costs generated by their injuries to have a chance at successfully pursuing a claim following a car wreck.
Certain types of expenses, like medical costs, are relatively easy to quantify because there are invoices and estimates related to someone’s care needs. Other losses can be harder to evaluate from a financial standpoint. Lost wages and lost earning potential are, for example, often significant but may be far more challenging to calculate due to the speculative nature of lost earning potential.
Adjusting for changes in future income
Calculating future earnings is more challenging than people realize. If someone were to simply multiply their current salary by the number of years until they plan to retire, they would likely underestimate what they would have earned for the rest of their career.
Employers frequently give raises based on performance, and workers with decades of experience often have higher earning potential than younger professionals. Many people make the most during their final years in their professions before retiring. Raises, including cost of living adjustments, can add up over 20 years to significantly increase someone’s annual salary by the time that they retire.
Additionally, workers have to consider the value of the benefits they currently receive and the enhanced benefits of those with more seniority or better positions within the company. Paid time off, supplemental insurance and other benefits can be worth 30% of someone’s base salary or even more in some cases.
It is often challenging to put together an accurate estimate of what someone would have earned if they had not suffered a significant injury. Still, doing so is very important to the process of securing adequate compensation after a crash. Establishing the true economic impact of crash-related injuries is a critical step for those hoping to hold the party who caused their crash accountable for the consequences of their actions.
