Out-of-pocket expenses are a type of economic loss that accident victims often overlook. But these expenses can add up, particularly if you have health insurance that requires you to pay a deductible or copays to receive medical care.
But out-of-pocket expenses can also cover other costs you incur due to your accident. They can include almost any reasonable and necessary payments for injuries and property losses.
What Are Out-of-Pocket Expenses?
Out-of-pocket expenses are amounts that you paid that are:
- Reasonable and necessary based on your injuries and property losses
- Caused by the actions of the at-fault party
An expense is reasonable if you did not overpay. For example, if you need to travel to receive medical treatment, a reasonable expense would be to stay at an average, safe hotel. An unreasonable expense would be to stay at a five-star luxury hotel.
Necessary means that the expense was related to a loss that you suffered. Typically, you will show that an expense was necessary by proving that a doctor recommended it. For example, renting a home hospital bed might not be necessary after you fracture your back. But if your doctor recommends it, you can usually seek compensation.
Causation requires that the expense meet two criteria. First, the at-fault party’s actions must fall within the series of events that led to the expense. This usually means you can prove a logical connection between the accident and your out-of-pocket expense.
Second, the at-fault party’s actions must be the type of action that could foreseeably cause harm. The other party does not need to foresee the actual expenses you incurred. But it must be the type of action that typically harms people.
Types of Out-of-Pocket Expenses in a Personal Injury Claim
Almost any expense you pay from your savings or income will qualify as an out-of-pocket expense if it meets the previously explained criteria. In a typical personal injury case, you will often have several sources of out-of-pocket expenses, including those incurred due to the following:
You may incur expenses when seeking and obtaining medical treatment.
Thus, if you need to travel to obtain medical treatment or therapy, your expenses might include:
- Fuel costs
- Airplane or train tickets
- Parking fees
- Hotel bills
- Restaurant bills
Similarly, you may incur expenses as part of your treatment. For example, you may need:
- Over-the-counter medications
- Bandages, surgical tape, and other medical supplies
- Durable medical equipment like wheelchairs or home hospital beds
Finally, you will probably incur expenses for doctors and hospitals, such as:
- Ambulance fees
- Hospital charges
- Doctor bills
- Health insurance copays and deductibles
All of these charges must satisfy the “reasonable and necessary” test. But out-of-pocket medical expenses are often the easiest to connect to your injuries.
After you suffer an injury, you may need to modify your home to accommodate your disabilities.
Some examples of home modifications you may need to make could include the following:
- Grab bars
- Wheelchair ramps
- Lowered counters
You may also need to hire people to perform the tasks you cannot perform due to your disabilities.
These replacement services could include:
Showing that accommodations are reasonable and necessary can be difficult because you need to show that you have disabilities to justify them.
You can pursue out-of-pocket expenses that you incur due to the loss of your vehicle in an auto accident.
Common property loss expenses include:
- Towing and storage expenses
- Rental car fees
- Rideshare or taxi fares
It is often relatively easy to prove that out-of-pocket expenses for property losses are necessary. But you must take care to ensure that the expenses are reasonable. For example, if you typically drive a compact car, renting a luxury car might seem unreasonable to an insurer or jury.
Documenting Out-of-Pocket Expenses
To include out-of-pocket expenses in your personal injury claim, you must prove their value and purpose.
You will typically do this using financial records showing the expenses you incurred, such as:
- Debit or credit card statements
The claims adjuster or jury will review your expenses to determine which were reasonable and necessary. Bear in mind that they will judge reasonableness and necessity based on your injuries. Severe injuries will almost always justify greater out-of-pocket expenses. Minor injuries will almost always limit what you can include.
You should maintain records of all the expenses you incur as a result of your injuries. If you only incurred an expense due to your accident, there is a good chance you can prove it was reasonable and necessary.
Lawyers and judges call this the but-for test. If you would not have incurred the expense “but for” your accident, it probably qualifies as reasonable and necessary.
How a Chicago Personal Injury Lawyer Can Help You Recover Your Out-of-Pocket Expenses
You should make sure you include all of your losses when you file a claim because you will only get one chance to assert them. Also, your lawyer may need to negotiate with the at-fault party and their insurer to settle your case. The more non-economic and economic damages you have, the more negotiating space your lawyer has.
Contact a Chicago personal injury attorney at Attorneys of Chicago Personal Injury Lawyers for a free consultation at (312) 929-2884 to discuss your out-of-pocket expenses and the compensation you can pursue.