What type of damages covers actual losses incurred by a plaintiff?

Study for the Insuring Personal Auto Exposures Test. Prepare with flashcards and multiple-choice questions, each question includes hints and explanations. Ace your exam with confidence!

Compensatory damages are specifically designed to cover the actual losses and expenses incurred by a plaintiff due to another party's actions or negligence. These damages aim to restore the injured party to the position they were in before the incident, which includes reimbursement for medical expenses, property damage, lost wages, and any other measurable economic losses. They can also encompass non-economic damages, such as pain and suffering or emotional distress, but the primary focus is on compensating for the real, quantifiable losses experienced.

In contrast, punitive damages are intended to punish the wrongdoer and deter similar conduct in the future, rather than compensate the victim for their actual losses. General damages typically refer to non-economic losses, while nuisance damages denote compensation related to the disturbance or interference caused by a nuisance, rather than a broad assessment of actual losses incurred. Thus, compensatory damages are the most accurate term for damages that cover actual losses experienced by a plaintiff.

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