Out-of-Pocket Expenses

After suffering a personal injury due to someone else’s actions, you are bound to hear that you can receive compensation for your economic damages, including your medical bills and lost income. 

Your compensation is meant to cover all your losses. What may not be as clear, however, is that you can also obtain compensation for other kinds of economic losses caused by the at-fault party’s actions. In fact, you can include expenses from many sources as long as they meet certain criteria and you document them properly. 

The most common often take the form of out-of-pocket expenses, and they can often go overlooked as you seek to put your life together after your accident. 

What Are Out-of-Pocket Expenses?

Out-of-pocket expenses are simply expenses you pay during your recovery. 

You typically pay these expenses through the following sources:

  • Income
  • Savings
  • Loan proceeds
What Are Out-of-Pocket Expenses?

These expenses do not include debts. As such, an unpaid doctor’s bill does not qualify as an out-of-pocket expense. Similarly, future costs, like the physical therapy you will receive next year, will not qualify as out-of-pocket costs.

You can seek compensation for these losses, but they are not deemed out-of-pocket expenses.

You can typically seek compensation for out-of-pocket expenses that you have already paid and that meet these three criteria:

  • They were necessary
  • They were reasonable
  • They were caused by another party’s negligent or intentional actions

When an expense meets these criteria, you can seek reimbursement from the at-fault party or their insurer. The insurer will pay your losses if the at-fault party has liability insurance. Otherwise, the party themselves will pay your damages.

Necessary Expenses

An expense is considered necessary when it has some rational relationship to your losses. Remember that “necessary” does not strictly mean you would have faced some catastrophe without it; instead, it means you had a reasonable reason for incurring it. For example, an expense may be necessary if your doctor recommended or prescribed it.

Reasonable Expenses

Reasonable expenses are fair based on what you received. In other words, an expense is reasonable if you did not overpay for the product or service you obtained.

Suppose you needed to rent a vehicle because your car was totaled in an accident. Renting the same class of vehicle as your destroyed vehicle would meet the reasonability standard, but renting a vehicle of a much higher class, such as a luxury sedan or a foreign sports car, will likely be deemed unreasonable.

Caused by Negligent or Intentional Acts

Causation exists when the at-fault party’s negligent or intentional act falls within the logical chain of events that led to the expense. For instance, you may need to buy new glasses because you broke your original pair in a slip and fall accident. In that case, you could likely show that the failure to mop the floor caused your broken glasses.

Examples of Out-of-Pocket Expenses in a Personal Injury Claim

Looking at the criteria in more detail, you will likely find many expenses that qualify as out-of-pocket expenses, such as:

Medical Costs

The money you spend to treat or obtain treatment for your injuries will typically qualify as reasonable and necessary out-of-pocket expenses. 

Some examples include:

  • Health insurance copays and deductibles
  • First aid supplies like bandages, slings, or eye patches
  • Durable medical equipment like wheelchairs or home hospital beds
  • Parking costs for medical appointments

Travel expenses for medical examinations and treatment may also qualify if you cannot obtain prescribed treatment close to home. 

For example, if you live in rural Arizona and must travel to Phoenix for treatment, you might incur reimbursable out-of-pocket expenses for:

  • Fuel
  • Bus or rideshare fares
  • Meals
  • Hotels

Keep in mind that if doctors classify your treatment as elective or experimental, you might have difficulty proving that it was reasonable and necessary.

Property Losses

When your car is damaged or destroyed, you will incur expenses associated with the loss, including the costs of:

  • Towing
  • Storage
  • Rental vehicle
  • Rideshare or bus fares

You cannot be given “double reimbursement” for these expenses. If you have collision coverage and rental car benefits in your auto insurance policy, you cannot also seek reimbursement for these expenses from the at-fault driver. That said, if you had to pay a deductible to get those benefits, the deductible might qualify for reimbursement.

Replacement Services

If your injuries disable you, even temporarily, you may need to obtain replacement services for tasks you cannot perform:

  • Transportation services like rideshares and taxis
  • Cooking and cleaning services
  • Childcare services

The necessity for these services may change as you regain functions during the healing process.

Home Modifications

If you need accommodations for your physical limitations, your expenses might qualify as reimbursable out-of-pocket expenses. 

Examples of these expenses include:

  • Ramps
  • Grab bars
  • Widened doors

These expenses are reasonable when you may suffer from your disabilities for long enough to justify a home modification.

Documenting Out-of-Pocket Expenses for Compensation

When you speak to a lawyer about your case, they will probably suggest you review your credit card and bank statements, receipts, and travel records to identify potential out-of-pocket expenses. You will use these documents to prove the existence, purpose, and amount of expenses.

To discuss your documented expenses and whether they qualify as reimbursable out-of-pocket costs, contact a personal injury attorney from Curiel & Runion Car Accident and Personal Injury Lawyers by calling (602) 595-5559 today for a free consultation. We serve all throughout Arizona and New Mexico, with our main offices located in Phoenix and Albuquerque.