Anyone who suffers an injury in an accident almost always wonders: how is personal injury compensation calculated? The short answer is: carefully, personally and often more complex than you might think. In this article we explain step by step how personal injury compensation is determined, which types of loss count and why professional guidance is important.

---

What exactly is personal injury compensation?

Personal injury compensation is all the losses that arise because someone suffers physical or psychological injury caused by another. It is not only about medical expenses, but also about loss of income, missed opportunities and non-material damage (pain and suffering).

Important: the starting point is always that the victim is financially placed in the position as if the accident had not occurred.

---

Step 1: Determining liability

Before damages can be calculated, it must be established who is liable. Without liability no compensation.

Liability can arise, for example, in:

• traffic accidents

• workplace accidents

• medical errors

• accidents in public spaces

Only once liability has been acknowledged (or legally established) can the damage calculation begin.

---

Step 2: Inventory of all damage items

Personal injury damages consist of multiple damage items, which together form the total damage amount. These are roughly divided into material damage and non-material damage.

---

Material damage (pecuniary loss)

1. Medical expenses

All costs that are not (fully) reimbursed, such as:

• deductible

• physiotherapy

• medication

• assistive devices

Future medical expenses also count.

---

2. Loss of income

One of the largest categories of damages.

Consider:

• lost wages

• reduced working hours

• loss of career opportunities

• loss of earning capacity for the self-employed

The following is considered:

• income before the accident

• current situation

• expected future without the accident

---

3. Costs for assistance and care

For example:

• household help

• informal care by family

• childcare

• modifications to the home or car

Also free help from family is legally recognized.

---

4. Other costs

Such as:

• travel expenses

• study delay

• additional expenses due to the injury

Everything that can be proven to be the result of the accident counts.

---

Non-material damage: pain and suffering compensation

In addition to financial damage, there is pain and suffering compensation. This is compensation for:

• pain

• sorrow

• loss of enjoyment of life

• psychological complaints

How is pain and suffering compensation determined?

Pain and suffering compensation is determined based on:

• severity and duration of the injury

• permanent impairments

• impact on daily life

• similar previous cases

There is no fixed formula. It is tailored to the individual case.

---

Step 3: Medical assessment

In cases of permanent or long-term injury, a medical end state is often required. Only then can it be properly assessed:

• what the permanent limitations are

• what future damages can be expected

Without medical clarity there is a risk of underestimation of the damages.

---

Step 4: Calculating future damages

Personal injury damages often extend beyond today. The following are considered:

• future income loss

• future care costs

• pension and accrual loss

This is done using calculation models and scenarios. Small assumptions can have major financial consequences.

---

Step 5: Negotiations with the insurer

The insurer of the liable party will:

• critically assess the damage items

• try to limit the amounts

• sometimes exert pressure to settle quickly

This is exactly where expert legal guidance makes the difference.

---

Common mistakes when calculating personal injury damages

❌ Accepting a settlement too quickly
❌ Underestimating future damages
❌ Not accounting for career loss
❌ Not waiting for maximum medical improvement

A signed agreement is almost always final.

---

Why a personal injury lawyer is important

A specialized personal injury lawyer:

• brings fully identifies all items of damage

• engages medical and financial experts if necessary

• negotiates with insurers

• prevents underestimation of your damages

The costs of legal assistance in personal injury cases are recovered from the liable party. For you, this is therefore free of charge.

---

Conclusion: how are personal injury damages calculated?

Personal injury damages are calculated by:

1. determination of liability

2. itemization of all heads of damage

3. medical assessment

4. calculation of future damages

5. legal negotiation

Every case is tailor-made. Two seemingly similar accidents can lead to completely different compensation amounts.