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What is a Damage Cap?

Damage caps limit the maximum amount of financial rewards a victim can receive from a defendant in a civil lawsuit. Most states have damage caps in place. Occasionally, cases are state exempt, where state-mandated damage caps do not apply. A local personal injury attorney is the most reliable source of information about state-dependent damage caps.

Personal injury cases have two types of damages, compensatory and punitive.

  • Compensatory damages are damages that replace lost property or cover any medical bills associated with a harmful accident. 
    • There are also two types of compensatory damages, economic and non-economic damages. Medical bills, loss of income, and out-of-pocket expenses are economic damages. Non-economic damages include pain and suffering, diminished quality of life, and mental anguish.
  • Punitive damages, or exemplary damages, punish negligence or gross misconduct by requiring higher monetary rewards to be paid by the defendant.

There are different damage caps for the type of damage that occurred. Economic damage caps cover concrete expenses like medical bills or paychecks. Non-economic damage caps are subjective and based on the deliberations of a jury.

Punitive damage caps are limited by federal guidelines, with most states imposing further limits on punitive damages.

Why do Damage Caps Exist?

Damage caps exist to limit the amount a service provider pays out. These limits prevent juries from awarding unrestrained payouts. Excessive payouts would radically increase the cost of insurance and medical fees to unreasonable levels.

Some states prevent a personal injury attorney from alluding to a damage cap. The omission of damage caps enables the trial jury to award whatever monetary amount they deem necessary. After passing the ruling, the damage cap is applied. In unique cases, a judge may impose a damage cap on payouts that they consider excessive.

Contact a Personal Injury Attorney

A skilled and knowledgeable attorney with years of experience is the most powerful tool for navigating a personal injury trial. For an attorney that has everything it takes to win, contact Robert J. DeBry & Associates today.

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