When you’re injured in a car accident, you’re entitled to recover more than just the cost of your medical bills. Michigan law allows injured victims to pursue compensation for a wide range of losses….some of which are easy to calculate, and others that are far more personal. These are generally classified as either economic or non-economic damages.
Understanding the difference between these two categories is essential if you want to receive the full value of your claim. Insurance companies often try to minimize or ignore non-economic losses even though they may be the most significant part of your recovery. This guide breaks down both types of damages, explains how Michigan law treats them, and shows how to protect your right to fair compensation.
What Are Damages in a Michigan Car Accident Case?
“Damages” is a legal term that refers to the losses someone suffers as a result of another person’s negligence. In a car accident case, damages form the basis of your claim against the at-fault driver and their insurance company. They’re also the key to determining how much your case may be worth. Michigan’s legal system recognizes two broad categories of damages:
Together, these categories help tell the full story of how the accident impacted your life and what you deserve in return.
What Are Economic Damages?
Economic damages are the tangible financial losses you suffer because of a car accident. These are the easiest to calculate because they come with documentation like medical bills, receipts, pay stubs, and invoices. In Michigan, economic damages are often covered in part by your no-fault Personal Injury Protection (PIP) benefits, but serious injury cases often involve pursuing additional compensation through a third-party claim against the at-fault driver. These damages help restore your financial stability after the crash. Whether it’s the cost of surgery or the income you missed while recovering, economic damages are meant to reimburse the money you’ve lost as a direct result of your injuries. Below is a breakdown of common types of economic damages and the kind of documentation typically needed to support your claim:
What Are Non-Economic Damages?
Non-economic damages are the intangible losses you experience after a car accident. Unlike medical bills or lost income, these damages don’t come with a receipt but they can still have a serious and lasting impact on your life. Pain, emotional trauma, and the inability to enjoy daily activities are all examples of non-economic harm. These losses are often the most difficult to quantify, which is why insurance companies may try to downplay or ignore them. However, under Michigan law, you may be entitled to compensation for non-economic damages if you meet the state’s serious injury threshold. These damages reflect the human side of your recovery and they matter just as much as the financial ones. Below are examples of non-economic damages commonly pursued in Michigan car accident cases:
When Can You Recover Non-Economic Damages in Michigan?
In Michigan, you can only pursue non-economic damages if your injuries meet a certain legal threshold and the other driver was more than 50% at fault. Under the state’s no-fault law, this threshold is known as a “serious impairment of body function.” It means that not all injuries qualify. Minor aches or short-term soreness likely won’t be enough to support a non-economic claim. To recover non-economic damages in a third-party claim against the at-fault driver, your injuries must:
This threshold is intentionally vague, and insurance companies often try to argue that your injuries don’t qualify. That’s why strong medical evidence and legal advocacy are critical if you want to pursue compensation for pain, suffering, emotional distress, or other non-economic losses.
Proving Economic and Non-Economic Losses
Whether you’re seeking compensation for medical expenses or pain and suffering, proof is everything in a car accident case. Insurance companies will not pay for damages they can’t clearly see, quantify, or verify especially when it comes to non-economic losses. For economic damages, you’ll need clear documentation such as bills, receipts, wage statements, or repair estimates. These losses are easier to calculate, but they still require detailed records to get reimbursed.
Proving non-economic damages can be more complex. These often rely on medical reports, therapist evaluations, personal journals, witness statements, and your own testimony to illustrate how the injury affected your life, mood, relationships, and routines. Below is a breakdown of common ways to strengthen your claim for both types of damages:
Get Help Calculating the Full Value of Your Car Accident Case
Insurance companies often focus on what they can easily measure like medical bills or short-term wage loss but that only tells part of the story. If your injuries are serious, you may be entitled to both economic and non-economic damages. Here’s how an experienced attorney can help maximize your compensation:
Understanding the difference between economic and non-economic damages is just the start. The next step is making sure you’re fairly compensated for all of it.
Free Case Review: Maximize the Value of Your Damages
If you’ve been injured in a Michigan car accident, don’t leave money on the table. Whether you’re facing mounting medical bills, lost income, or ongoing pain, you may be entitled to compensation that goes far beyond what the insurance company initially offers. At The Clark Law Office, we focus on making sure our clients recover everything they’re legally owed including both economic and non-economic damages. You’ll work directly with an experienced attorney who knows how to calculate the full value of your claim, build strong supporting evidence, and push back against lowball settlement offers. Contact us today to schedule your free consultation and learn what your claim may really be worth.
Learn how different types of damages affect your total recovery in our car accident compensation guide.
Common Questions About Economic and Non-Economic Damages in Michigan
Resources and References
If you’re recovering from a car accident and want to better understand what types of compensation may be available, the following resources offer reliable, up-to-date information:
