What do compensatory damages generally cover?

Compensatory damages are designed to provide financial restitution to a party who has suffered loss or harm due to the actions of another. This type of damage aims to bring the injured party back to the position they would have been in had the incident not occurred, particularly regarding monetary losses. This encompasses payments for injuries sustained, property damage, and other economic losses that can be quantified in monetary terms.

Money payments for injury or damage include medical expenses, repair costs, lost income due to inability to work, and other related expenses incurred as a direct result of the event. By focusing on compensating these specific economic impacts, compensatory damages play a crucial role in personal injury cases and insurance claims, ensuring that the injured party is adequately compensated for their losses.

While emotional distress and legal fees can also be components of some claims, they don't represent the primary purpose of compensatory damages, which is to cover actual financial losses incurred. Punitive damages serve a different function, aimed at punishing the wrongdoer rather than compensating the victim.