Reviewed by Daniel Mirkovic
Updated July 19, 2024 | Published July 17, 2024
Noun
spe·cial da·ma·ges | ˈspɛʃəl ˈdæmɪdʒəz
Definition: Compensation for quantifiable losses awarded to the plaintiff in a tort law case.
The judge found him liable for the accident and ordered him to pay over $50,000 in special damages.
The important points
Damages are compensation someone must pay when they are legally liable for harming another party.
Special damages are based on harms that have quantifiable value, like property damage.
Liability insurance often covers special damages for which a person is liable.
In tort law, when someone is found liable for harming another party, they will usually be required to compensate that party. These types of compensation are known as damages.
There are many types of damages. Special damages are damages awarded as compensation for losses that have a determinable value. They are meant to indemnify a person who suffered a loss. Special damages are also known as economic damages or pecuniary damages.
Example
Jamie cuts down a large dead tree on his property. Having little lumberjacking experience, the tree accidentally falls onto his neighbour Nadia’s garage.
Nadia has her garage repaired, costing $15,000. She sues Jamie to recover this cost.
Jamie is found liable for the damage and ordered to pay $15,000 in special damages — the quantifiable cost of compensating Nadia for her loss.
Special damages apply when there’s tangible property damage, like in this example. But they also apply to personal injury cases, where they might cover out-of-pocket expenses like ambulance fees, or wages lost due to the injury.
Special damages contrast with general damages. General damages are compensation for things that don’t have a price tag, like pain and suffering or a reduced quality of life following an injury. Special and general damages are known as compensatory damages, because they compensate the victim. There are also punitive damages, which punish the wrongdoer instead.
Special damages are very much connected to insurance. Most of the time, if someone’s liable for an incident (particularly if it’s an accident), insurance could cover the damages they need to pay as well as associated legal costs. This is known as liability insurance.
Car insurance covers third-party liability arising from an at-fault collision while driving. Home insurance covers personal and premises liability, which arises either from one’s direct actions or from their ownership of their home.
Insurance covers both special and general damages for which someone is liable. Insurance doesn’t cover punitive damages, however.
Many damages associated with cars and car insurance are of the special variety. If another driver is responsible for damaging your car, it’s easy to ascertain the cost of that damage.
But, some types of car insurance coverage are designed to reduce the number of vehicle accident lawsuits. Some provinces (like Ontario and Alberta) have Direct Compensation for Property Damage (DCPD) systems. Under DCPD, most vehicular damage caused by another driver is dealt with by each vehicle owner’s personal insurance, with no need for anyone to sue.
Under DCPD, when someone is at fault for an accident, their insurer won’t need to pay to repair the other parties’ vehicles. Each individual involved will deal with their own insurer for the repairs. Most injury and rehab costs fall under public health coverage or accident benefits coverage. Accident benefits are available to anyone injured in an accident — regardless of whether they have a car insurance policy. Lawsuits and resulting damages only apply in extreme cases, such as a person suffering a catastrophic injury in a vehicle accident. In such situations, they can sue the at-fault driver to recover damages beyond what they receive from insurance.
It’s important to know, however, that DCPD coverage only applies in the province where the insurance policy was sold. Someone from Ontario who is responsible for an accident outside of the province could be found liable for damages, special or otherwise.
Looking for another insurance definition? Look it up in The Insurance Glossary, home to dozens of easy-to-follow definitions for the most common insurance terms. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
About the expert: Daniel Mirkovic
A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.
Check out these related articles:
Get a personalized online home insurance quote in just 5 minutes and see how much money you can save by switching to Square One.
Even when you take precautions, accidents can happen. Home insurance is one way to protect your family against financial losses from accidents. And, home insurance can start from as little as $12/month.