Georgia Property & Casualty Practice Exam

Which of the following accurately describes compensatory damages?

1. They are intended to punish the wrongdoer.

2. They are awarded for both intangible losses and measurable losses.

3. They cover only economic damages.

4. They are another name for special damages.

The correct answer is: They are awarded for both intangible losses and measurable losses.

Compensatory damages are designed to compensate the injured party for their actual losses, making option B the most accurate description. This type of damage seeks to restore the victim to the position they would have been in had the incident not occurred. Compensatory damages include two main categories: economic losses, which are measurable and tangible, such as medical expenses and lost wages, and non-economic losses, which relate to intangible impacts like pain and suffering or emotional distress. The inclusion of both tangible and intangible losses is crucial because it acknowledges the full scope of the injury's impact on the victim's life. By covering both types of losses, compensatory damages aim for a comprehensive approach to restitution, ensuring that individuals are fairly compensated for all aspects of their suffering. Therefore, option B accurately represents the nature of compensatory damages in the context of legal standards.