What Are Compensatory Damages?

When you receive compensation for your injuries in an accident, you usually receive compensatory damages. Compensatory damages cover the things you lost as a result of the accident. The purpose is to make you whole and restore you to the same financial position you were in before you were injured.

What Are Compensatory Damages?

Compensatory damages pay you back for what you lost due to your injury. You might have had to spend money, such as on your medical bills, or you might have lost money, such as not being able to work.

Compensatory damages do not punish the other party. You don’t receive compensation simply because the other party did something wrong but because their negligence or other wrongful act caused you to lose something. If you didn’t lose anything, you have nothing to receive compensation for. Similarly, the amount of compensatory damages you can receive will vary even in similar accidents and injuries because what each plaintiff lost will vary.

What Is an Example of a Compensatory Damage?

The most common example of a compensatory damage is medical bills. If you’re taken to the hospital after a car accident and receive $100,000 in treatment for your injuries, you’re entitled to be compensated for that $100,000 in your car accident case.

You may also have health insurance, auto insurance, or some other insurance policy that would reimburse you after an accident. Because the purpose of compensatory damages is to compensate you, you’re not entitled to be paid for the same expenses by both your insurance company and the person who caused your accident. You can recover the $100,000 minus what your insurance company paid you. Your insurance company is entitled to also sue the person who caused your accident for the amount that your insurance company paid you.

What Are the Types of Compensatory Damages?

There are two categories of compensatory damages. One is specific or economic damages. The other is general or non-economic damages.

Specific Compensatory Damages

Specific compensatory damages are also called economic damages. These are the types of damages with a direct monetary value.

  • Medical expenses. Medical expenses are the most common type of damage in a personal injury claim. This includes all the expenses you incurred, such as the ambulance charges, emergency room care, extended stay in the hospital, follow-up visits, and rehabilitation. You are entitled to recover for any medical expense related to your accident that you have already incurred or will incur in the future.
  • Lost wages. If you miss work due to your injury and recovery, you are entitled to be compensated for the pay you lost. The same applies if your injury causes you to not be able to return to work or if you have to change to a lower-paying job.
  • Property damage. Property damage covers physical damage to your property, such as your car or other things you had in it at the time of your accident.
  • Additional expenses. You may also have additional temporary or permanent expenses due to your injury. You may have had to pay for childcare while you were in the hospital. If you have a permanent or long-term disability, you may have to make modifications to your home or hire additional help around your house. You are also entitled to recover for these additional expenses.

General Compensatory Damages

After an accident, you may also have a reduction in your quality of life that doesn’t have a direct dollar value. These non-economic damages can include physical pain, mental health challenges, loss of ability to participate in activities, loss of the companionship of your spouse, or physical disfigurements.

Even if there is no direct dollar value on these types of losses, you are still entitled to be compensated for them. The amount you can recover for non-economic losses in a personal injury case is largely up to the jury.

How to Calculate Compensatory Damages

Calculating compensatory damages can be either easy or complicated, depending on the situation. For money you have already spent or lost, you are generally entitled to that exact dollar value.

For money you will have to spend in the future, the difficult part is that you can only sue once. You also generally need to sue within two years of your accident. You will need to work with your attorney to calculate what your future expenses will be. This may involve getting opinions from your doctors or other expert witnesses.

For non-economic damages, there are no set amounts, and the jury has a wide amount of discretion. Your attorney can help you estimate what you may be able to receive based on what happened in prior cases and how the facts of your case are similar to or different from those cases.

Finally, you may need to adjust your compensatory damages for comparative negligence. Comparative negligence applies when you also had some responsibility for your accident. If you were less than 50% at fault, you would reduce your claim by your percentage of fault. If you were more than 50% at fault, you generally aren’t entitled to recover anything. For example, if you were 25% at fault in an accident where your total losses are $100,000, you subtract $25,000 for $75,000 in compensatory damages.

Request a Consultation

Even though compensatory damages are simple in theory, the legal rules can actually be quite complicated. You may not be aware of things you can be compensated for or what might prevent you from being compensated. To find out how much your case is worth and how to get a full recovery, call Wapner Newman Attorneys at Law at (215) 569-0900.