Personal injury can be caused in an accident: in the traffic, during sporting, at home, at school or at work. Injury can also be caused by medical mistakes, or criminal offenses. Victims of personal injury may be entitled to compensatory damages, if the injury was caused by someone else or if the event are covered by an insurance. Such damages are:

• Loss of income or earning capacity,
• Compensation for loss of life quality caused for example by pain, disability, or emotional distress,
• Extra costs, for example medical costs.

Usually the damages are suffered on a yearly basis but the compensation payment is a once-off payment. This calculator computes this once-off payment. After receiving the once-off payment it shows a graph with the remaining amount for every year. The calculator also shows a second graph with yearly amounts that should be paid if the compensation is paid on a yearly basis.

The future value of this payment is influenced by the following factors:

• the interest rate,
• the inflation,
• taxes: wealth tax and tax on interest

The higher the expected long term interest rate is, the lower the damages paid need to be to compensate for example a loss of income. Similarly the higher the inflation and taxes are the higher the damages need to be.

The problem is now how to calculate a once-off financial compensation need to be to compensate for yearly losses such as loss of income and medical costs given the interest, the inflation and tax rates. This is exactly what the personal injury damages calculator does for you. Normally you will need the help of a professional to determine the yearly recurring amounts but you gain a lot of insight when playing with this calculator first.

Usage of the Personal Injury Calculator

See this page for an example calculation with the personal injury calculator.

In the first four fields a comparison is made between the situations before and after the accident. Enter net amounts, after taxes, for the costs and the pre- and post-injury income. You can enter the interest, inflation and tax rates in the next four fields.

Then enter the total duration of the personal injury in years. Often this is the remaining years of the life of the victim, therefore the number of years have to be estimated. Suppose someone is 45 when the injury happens and it is estimated that he will die at age 70 while normally his expected age would be 80. Then the most logical figure for the duration of the injury is 25 years. The loss of ten years of life expectancy should be compensated on top of the the result returned by this calculator, for example with 10 years times a standard amount per year.

With the remaining fields you can enter changes in the expected situations without the injury and with the injury over time. For moments in time after the injury you can enter different incomes and expenditure for the situations with and without the injury. Again enter net amounts, after taxes, for the costs and the two incomes. The computation will correct these amounts for inflation.

The results of the calculator should be interpreted as approximations rather than as exact figures.