Out-of-Pocket Expenses
When you get into an accident caused by someone else’s actions, you can pursue an injury claim.
You can seek compensation for the economic and non-economic losses you incurred through this claim.
Out-of-pocket expenses do not form a separate category of damages.
Instead, they are a type of economic loss characterized by the fact that you paid for them “out of pocket.”
What Are Economic Losses?
Economic losses cover the financial impacts of your accident. To recover compensation for these losses, you must show that the loss was:
- Caused by the accident
- Reasonable
- Necessary
Economic losses can include expenses that you:
Lost
Economic losses include anything that was lost in your accident and was not replaced. Suppose that you were wearing a pair of prescription sunglasses when you got into a car accident. You lost the value of these glasses when the crash destroyed them. Your economic losses can include the value of the sunglasses.
These losses can also include a diminished value. Thus, if you injure your back in a slip and fall accident, you might lose the ability to perform your job. You might still have the skills to perform a different job but for less pay. The diminishment in your earning capacity constitutes an economic loss.
Paid
Any amounts you paid as a result of your accident will count as economic losses. Suppose that you paid a hospital for an X-ray after a box fell on your foot in a workplace accident. The payment qualifies as an economic loss.
Finally, economic losses include amounts you could pay in the future. For example, if your doctor testifies you will need a knee replacement in two years due to the damage from a pedestrian accident, your losses include the future cost of the surgery.
Are Legally Obligated To Pay
This type of loss also includes amounts you are legally liable to pay. Thus, a bill from the hospital for the X-ray also qualifies as an economic loss, even if you have not yet paid it.
Sometimes, medical providers will accept a medical lien against your personal injury claim instead of payment. A lien stops any collection efforts for unpaid medical bills.
The lien is paid when you get your personal injury settlement. In a typical case, your lawyer will receive the settlement check from the insurer. They deduct their contingency fee, pay the medical liens, and pay the rest to you.
Your economic losses include these debts.
Examples of Out-of-Pocket Expenses
Out-of-pocket expenses include economic losses you paid using cash, checks, or credit or debit cards. In many cases, you cannot avoid incurring out-of-pocket expenses. For example, if you need a bottle of ibuprofen, the drugstore will expect you to pay for it.
You can seek compensation for these expenses as long as they meet the “reasonable and necessary” test. An expense is reasonable if you did not overpay for it. An expense is necessary if the purpose of the expense was justified based on your losses.
Some common examples of reasonable and necessary out-of-pocket expenses include:
Medical Expenses
Amounts you pay out of pocket for reasonable and necessary medical treatment qualify as economic losses. These include the following:
- Health insurance copays
- Expenses for over-the-counter drugs and medical supplies like gauze
- Rental fees for durable medical equipment like a wheelchair
If you need to travel for prescribed medical treatment, your travel expenses may also qualify as economic losses.
Replacement Services
You may need to pay for services if your injuries disable you. Some replacement services you might need include:
- Childcare
- Cooking
- Cleaning
- Transportation
For example, let’s say that you fractured your femur and could not drive for six weeks while you had a cast on your leg. Rideshare fares to work and the grocery store probably qualify as reasonable and necessary.
Home Modifications
You may need to temporarily or permanently modify your home to accommodate your disabilities. You can seek reimbursement for the costs of these reasonable and necessary home improvements, such as wheelchair ramps or shower grab bars.
Property Losses
You can include out-of-pocket expenses that arise from your property losses. For example, when your car gets damaged in a car crash, you will spend money on:
- Towing and storage of your damaged car
- Rental cars
- Taxi, rideshare, or bus fares
These expenses also qualify as economic losses as long as they meet the “reasonable and necessary” test.
Tracking and Recovering Out-of-Pocket Expenses
You will need to document the amounts you spent. You will submit financial records such as bank and credit card statements, receipts, and checks with your insurance claim to prove your expenses.
Out-of-pocket expenses can make up a significant portion of the losses you suffer in an accident. Contact an experienced injury lawyer before filing your accident claim to make sure you have documented and claimed all your out-of-pocket expenses.
