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What Are Compensatory Damages?

Posted in Personal Injury

The purpose of a personal injury claim is to make an accident victim whole again. It is meant to compensate a victim for the losses and expenses suffered because of the accident or injury. It does this by awarding compensatory damages, in a successful personal injury case. Learn more about compensatory damages to protect your right to recover financially if you are a plaintiff in a personal injury case in New Mexico.

What Are Compensatory Damages in a Personal Injury Case?

As the name implies, compensatory damages are meant to compensate an accident victim for the actual amount of loss that he or she suffered. They repay the victim for all of the financial and nonfinancial losses connected to the accident. The financial losses are known as economic or specific damages, while nonfinancial ones are noneconomic or general damages. Compensatory damages are available in a personal injury case if the plaintiff meets the burden of proof and demonstrates that the defendant is liable, or financially responsible, for his or her injuries and losses.

Examples of Compensatory Damages

When you begin a personal injury case in New Mexico, you or your personal injury attorney will submit a demand letter to the insurance company of the at-fault party. This demand letter should include a comprehensive list of the losses for which you are seeking financial compensation from the defendant. Understanding which losses you can include in your case can help you demand a fair amount in monetary damages. Common examples of specific damages are:

  • All present and future necessary medical care
  • Physical therapy and rehabilitation costs
  • Medications, prescription drugs and medical devices
  • Nursing or live-in care, including domestic services
  • Disability accommodations and related expenses
  • The value of lost or damaged property
  • Losses of income or earning opportunities
  • Out-of-pocket costs, such as travel or transportation

Examples of general damages are:

  • Physical pain and suffering
  • Chronic pain
  • Emotional distress
  • Mental anguish
  • Psychological trauma
  • Disfigurement or scarring
  • Post-traumatic stress disorder
  • Anxiety
  • Stress
  • Inconvenience
  • Loss of enjoyment of life
  • Lost quality of life
  • Loss of consortium

To be awarded compensatory damages, you or your attorney must prove that you suffered these actual damages because of the defendant’s breach of the duty of care, or the responsibility to act with a normal amount of care. A judge or jury will listen to your claim and review the evidence submitted. Then, the courts will determine if you have met the burden of proof and suffered losses that equate to a monetary value.

What Are Punitive Damages?

Compensatory damages are the most common type of financial compensation awarded in personal injury, medical malpractice, premises liability, product liability and wrongful death lawsuits. The other category of damages is less common: punitive damages. The purpose of punitive damages is to punish a defendant rather than to compensate a plaintiff. In New Mexico, punitive damages are only awarded in cases that involve a defendant’s conduct that is malicious, reckless, willful, wanton, fraudulent or in bad faith.

Are There Caps on Compensatory Damages in New Mexico?

Many states impose damage caps on personal injury lawsuits. These are limits on the amount of financial compensation that a plaintiff can receive. Damage caps are controversial, with many states ruling them unconstitutional. However, the New Mexico Supreme Court ruled in 2021 that the state will continue to use a cap. The court ruled to uphold the existing damage cap, which applies to medical malpractice cases only. It imposes a limit of $600,000 on non-medical and non-punitive damages. There are currently no other damage caps in New Mexico, meaning there is no limit on other types of personal injury cases.

How Much Is Your Case Worth?

Discuss how much your personal injury case might be worth in compensatory damages with a personal injury lawyer from The Fine Law Firm before you accept an insurance settlement. We will give you a case evaluation that you can trust.