Money Damages

What Does Money Damages Mean?

Money damages are monetary awards that one party is ordered to pay to another after losing a civil lawsuit. Insurance companies often sue each other for money damages, and policyholders may also sue insurance companies for money damages in certain situations. Money damages are also what liability insurance is built to pay, which is why drivers need to think carefully about how much liability coverage to carry on their auto policy.

Insuranceopedia Explains Money Damages

An insurance policyholder may sue an insurance company for money damages if the company refuses to reimburse a covered loss. In such a case, if the policyholder can prove that the insurance company is obligated to pay for the loss based on the terms of the insurance contract, the company could be forced to pay money damages to the policyholder. Businesses face the same risk, and general liability insurance pays the money damages a company is ordered to cover when a customer or third party wins a lawsuit against it.