Economic vs. Non-Economic Damages in Tennessee: What to Know

Filing a personal injury lawsuit is rarely something people plan for. Suddenly, you are navigating insurance adjusters, medical appointments, and vehicle repairs, all while trying to recover or help someone recover from their injuries. When you start discussing compensation with an attorney, you will likely hear two legal terms: economic damages and non-economic damages.

Understanding the difference between these two categories is vital because they make up the total compensation you might be entitled to receive. In Tennessee, the law treats these two types of damages differently, especially when it comes to the maximum amount of money a jury can award.

At Bill Easterly & Associates, we believe an informed client is an empowered client. This guide breaks down exactly how Tennessee law defines these losses and what that means for your potential settlement.

Economic Damages Explained

In the simplest terms, economic damages refer to the financial losses you have suffered because of an accident. These are objective, tangible costs. If you can pull a receipt, an invoice, or a pay stub out of a file to prove a cost, it likely falls under this category.

Because these damages are based on hard math, they are often easier to calculate than subjective losses. There is typically no “cap” or limit on economic damages in Tennessee; if you can prove you lost the money or incurred the debt due to the accident, you can seek reimbursement for it.

Common Types of Economic Damages

• Medical Expenses: This is often the largest portion of a claim. It includes ambulance fees, emergency room visits, surgeries, hospital stays, and medication. It also covers future medical expenses if your injury requires ongoing treatment.
• Lost Wages: If you missed work to recover, you are entitled to the income you lost during that time.
• Reduced Earning Capacity: Sometimes, an injury is severe enough that you cannot return to your old job or work the same number of hours. If your ability to earn a living in the future has been damaged, this financial loss is calculated and included.
• Property Damage: This covers the cost to repair or replace your vehicle and any personal items damaged in the crash.
• Rehabilitation Costs: This includes physical therapy, occupational therapy, and costs for long-term care facilities if necessary.

Proving Economic Losses

The key to recovering economic damages is documentation. You cannot simply tell a jury that you lost money; you must show them. This is why attorneys constantly remind clients to keep every medical bill, pharmacy receipt, and repair estimate. We also use employment records and tax returns to verify lost income.

Non-Economic Damages Explained

While economic damages cover what you have paid, non-economic damages cover what you have felt. These are the subjective, intangible losses that do not come with a price tag or a receipt. They represent the human cost of the injury — the way the accident has diminished your quality of life.

Because these losses are subjective, they are harder to quantify. How do you put a dollar amount on back pain that prevents you from sleeping, or the anxiety you feel every time you get back in a car? Despite the difficulty in calculation, these damages are often the most significant part of a recovery because they acknowledge the trauma you have endured.

Common Types of Non-Economic Damages

• Pain and Suffering: This encompasses both the physical pain of the injury and the recovery process, as well as mental suffering.
• Emotional Distress: This can include anxiety, depression, insomnia, and Post-Traumatic Stress Disorder (PTSD) resulting from the accident.
• Loss of Enjoyment of Life: If you can no longer participate in hobbies, sports, or daily activities you once loved, you can be compensated for that loss.
• Loss of Consortium: This is a legal term for the negative impact an injury has on the victim’s relationship with their spouse or family, including loss of companionship or affection.

Calculating the Intangible

Since there are no receipts for pain, attorneys and insurance adjusters often use the “multiplier method” to estimate non-economic damages. This involves taking the total amount of economic damages (like medical bills) and multiplying that number by a figure — typically between 1.5 and 5 — depending on the severity of the injury. For example, a minor injury might use a multiplier of 1.5, while a severe, permanent injury might use a multiplier of 4 or 5.

Understanding Tennessee’s Damage Caps

One of the most critical aspects of Tennessee personal injury law is the existence of damage caps. The state legislature has placed a statutory limit on the amount of money a plaintiff can receive for non-economic damages.

For most personal injury cases, Tennessee law caps non-economic damages at $750,000.

This means that even if a jury believes your pain and suffering is worth $2 million, the judge will reduce that specific portion of the award to $750,000. It is important to remember that this cap does not apply to your economic damages (medical bills and lost wages), which remain uncapped.

The Catastrophic Injury Exception

There is an exception to the general rule. If an injury is deemed “catastrophic,” the cap on non-economic damages increases to $1 million.

Tennessee law is very specific about what qualifies as a catastrophic injury. To be eligible for the higher cap, the injury must involve:

• Spinal cord injuries resulting in paraplegia or quadriplegia.
• Amputation of two hands, two feet, or one of each.
• Third-degree burns covering 40% or more of the body (or 40% or more of the face).
• The wrongful death of a parent of a minor child.

A Note on Punitive Damages

There is a third category of damages known as punitive damages. Unlike economic and non-economic damages, which are designed to make the victim whole, punitive damages are designed to punish the defendant.

These are rare and are only awarded in cases where the defendant acted maliciously, intentionally, strictly fraudulently, or recklessly. For example, a standard distracted driving case likely won’t qualify, but a high-speed drunk driving case might. These are awarded at the court’s discretion to deter similar behavior in the future.

Local Help for Cheatham County Victims

Navigating the math of economic losses and the statutory limits of non-economic caps is difficult when you are in pain. You need an advocate who understands the local courts and Tennessee statutes.

If you have been injured in a car accident in Cheatham County, including Ashland City, Pleasant View, or Kingston Springs, do not face the insurance companies alone. The team at Bill Easterly & Associates is ready to fight for the maximum compensation you deserve. We can help you gather the necessary evidence to prove your economic losses and build a compelling narrative for your non-economic damages.

Contact Bill Easterly & Associates today for a free consultation.