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You will probably run across the term “out-of-pocket expenses” as you pursue an injury claim. These expenses cover a wide range of costs and losses that result from your accident. They share one feature in common — you pay them out of your savings, wages, and other assets as you incur them.
These losses are particularly damaging because the money you pay out of pocket is not available for essentials like medical treatment and living expenses. Fortunately, you can seek reimbursement for these costs through a personal injury claim.
To understand these expenses, you first need to comprehend economic losses. You will experience many losses after suffering a traumatic injury. Economic losses represent the financial impacts. Economic losses include expenses you have paid and those you are responsible for paying eventually.
Economic damages include:
Economic losses can include both past and future losses. If you need surgery in the future, your claim can encompass the reasonable expenses you will incur when that happens. You will use testimony from your doctor to prove the need for the surgery and the associated medical bills.
Out-of-pocket expenses constitute a subset of economic losses and they have several characteristics, including the following:
Thus, out-of-pocket expenses do not include unpaid bills and future paychecks you cannot earn as a result of your injuries.
“Causation” covers two concepts. First, the other party’s actions must fall within the chain of events that ended with your losses. Causation only exists if you can show a logical connection.
Second, the losses must have been reasonably foreseeable in light of the other party’s actions. That does not mean the other party must have known you would incur these expenses. Instead, it means the other party’s actions must be the type that could reasonably cause injuries or property damage.
“Reasonable” refers to an expense that would make sense to an objective observer. This usually means you did not overpay. Reasonable also means the expected benefits justify the expense.
“Necessary” usually does not mean you will die or suffer permanent injury without it. You typically prove necessity with testimony or records showing that your doctor recommended it and that the expense was not cumulative. For example, chiropractic treatment might not qualify as necessary if you are already receiving physical therapy.
You might incur out-of-pocket expenses for many reasons. Some common expenses you might pay out-of-pocket include the following:
Even if you have health insurance, you may need to pay to treat your injuries or access treatment.
Some common medical costs paid out of pocket include:
If you lack health insurance, doctors will sometimes provide treatment in exchange for a medical lien. In essence, they have a legal right to payment from the personal injury compensation you recover. Other doctors will require full payment out of pocket.
You may also incur travel expenses to seek medical care that you cannot obtain locally. These expenses, such as fuel, airplane tickets, and hotels, may qualify as reimbursable out-of-pocket expenses.
If you cannot carry out your duties around the house, you may hire someone to do them. The costs of replacement services qualify as out-of-pocket expenses.
Some activities your doctor might prohibit due to your injuries include:
In some cases, you might not even be able to shower, dress, or feed yourself. In those instances, your economic losses include the out-of-pocket costs for a caretaker.
You may need to modify your home or vehicle to accommodate the effects of your injuries, such as by installing:
You may also need to purchase durable medical equipment. For example, your doctor might recommend you buy or rent a hospital bed for your home.
To recover your out-of-pocket expenses, you need documentation that identifies the expense and its amount.
You may need records such as:
When you meet with a lawyer, they will discuss your out-of-pocket expenses, explain which expenses qualify, and go over how to document them using your financial records. Your lawyer will then use those records to make sure you submit the right amounts for your insurance claim. Any out-of-pocket expenses you seek to recover must meet the “reasonable and necessary” test threshold.
Contact Davis Law Group Car Accident and Personal Injury Lawyers at 206 727 4000 to discuss your out-of-pocket expenses and whether you can recover them in a personal injury claim.
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