What are compensatory damages?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 20, 2013

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Compensatory money damages are intended to make you “whole”. For example, if a person, while driving negligently, totally destroys your 1992 Ford, the compensatory damages would normally equal the market value of your 1992 Ford at the time of its destruction, less any scrap or salvage value. You could receive the fair market value of the car, not enough to buy a new model, even if that is what you choose to do.

Depending on the state and circumstances, you may sometimes be entitled to receive compensation for the loss of use of the car (such as while it was being repaired), or the loss of profits that you would normally have earned while replacing the car, if you were using the car as a taxi, for example.

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