What are the Limitations on Damages in Car Accidents

While seeking compensation for damages in a car accident case, it is important to be aware of certain limitations that may affect the amount you can recover. These limitations can arise from statutory provisions, comparative negligence, or insurance policy terms.

Statutory Limits on Damages:

Some jurisdictions impose limits such as damage caps and thresholds that limit how much compensation can be recovered. The purpose is to provide a level of predictability and fairness in the legal system and prevent excessive awards for damages. 

  • Damage Caps: A predetermined limit of how much compensation can receive for economic and non-economic damages.
  • Thresholds: To receive non-economic damages, a victim must first meet a threshold to be eligible to recover such damages. For example, a victim may need to demonstrate that their injuries reach a certain severity or that they have incurred a specific level of medical expenses before being eligible to seek non-economic damages.


Negligence laws can vary from state to state. Some jurisdictions use a contributory negligence system while others use a comparative negligence system. Nevertheless, negligence is a key concept in a car accident case as it helps determine the liability and responsibility of each party involved. 

  • Contributory Negligence: If the victim is found to have contributed even slightly to the accident, they may be barred from recovering any damages. There are also hybrid systems that have a threshold for a victim to recover damages. For example, a victim can only recover damages if they are found to be less than 50% responsible for the accident.
  • Comparative Negligence: The amount of damages a victim can recover is reduced by their percentage of fault. For instance, if a victim is found to be 20% at fault and the total damages are $100,000, their recovery would be reduced to $80,000.

The outcome of damages is highly dependent on the type of negligence involved in the accident. While a plaintiff may be able to recover damages in a comparative negligence jurisdiction, in a contributory negligence system, any fault on behalf of the plaintiff completely restricts their ability to recover damages for their injuries.

Insurance Coverage and Policy Limits

The whole purpose of insurance is to help you pay for expenses in the event of a car accident. However, these policies have limits, which are the maximum amounts the insurance company will pay out for various types of damages. The limits can vary depending on the policy terms and the specific coverage purchased by the at-fault party. 

If the damages exceed the policy limit, the victim may not be able to recover the full amount from the insurance company. In such cases, the victim may need to explore other options such as filing a lawsuit against the at-fault party.

Additionally, there is protection available if the at-fault party lacks insurance or has insufficient coverage. In this case, there are specific coverages available that aim to protect you from these incidents. This is called underinsured/uninsured motorist coverage and it protects you if you’re hit by a driver who has limited coverage or who doesn’t carry any auto insurance. Some states require this type of coverage while others provide this insurance through different levels of coverage.

Statute of Limitations for Claims

The statute of limitations refers to the time period within which a legal action must be initiated after an incident or injury occurs/ This limitation exists to ensure that claims are filed within a reasonable timeframe and to protect defendants from the indefinite threat of litigation. 

In a car accident claim, the statute of limitations varies from jurisdiction to jurisdiction so it’s crucial to understand what your state-specific statute of limitations is. They can have relatively short periods, such as one or two years, while others may allow 4 or more years to file a claim. The time starts from the date when the injury resulting from the accident was discovered, and in some cases, should have been discovered.

Waiting too long to file a claim can have adverse effects on your claim and can impact the availability of evidence and witness testimony. Memories fade, physical evidence may be lost, and witnesses become difficult to locate. That’s why it’s vital to file your car accident claim promptly.

No-Fault Insurance Systems

In some jurisdictions, car accident compensation is governed by a system known as “no-fault insurance,” and under this system, drivers involved in car accidents are required to seek compensation from their own insurance companies regardless of who is at fault for the accident. For example, in Florida, anyone in a car accident can recover losses from their insurer, regardless of fault. According to the car accident lawyers at Shapiro | Delgado | Hofmann, the no-fault systems are designed to provide drivers with quick and easy access to compensation for their losses without the need for a lengthy and costly legal battle.

While this quick relief is nice, these systems can lead to increased insurance premiums and may limit an injured party’s ability to seek compensation for pain and suffering or other non-economic damages.

Seek Legal Advice

Remember that the limitations on damages can vary by jurisdiction, so it is important to seek legal advice specific to your location and circumstances. An attorney can assess the unique factors of your case, determine any limitations that may apply, and advocate for your rights to recover fair compensation within those limitations. 

Steven Hatman
Steven Hatman

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