Economic damages are damages that you can put a fixed price on. In car accident cases, economic damages would include such things as: The cost to repair or replace the vehicle, the cost of a rental car, reimbursement for lost wages, and the cost of medical bills. The key characteristic of economic damages is that they have a fixed price that is not subjective.
Noneconomic damages are damages you cannot put a fixed price on. Those include compensation for pain and suffering, paralysis, loss of life, and other similar injuries. Unlike economic damages, noneconomic damages are subjective because different people might value an injury differently.
Compensatory damages are those designed to compensate a victim for his or her losses. Compensatory damages include both economic and noneconomic damages. Compensatory damages are the civil law equivalent of restitution to a crime victim.
Punitive or Exemplary Damages:
While compensatory damages are designed to compensate a victim, punitive damages (sometimes called exemplary damages) are designed to punish the defendant. Punitive damages are the civil law equivalent of a criminal fine. Juries can only award punitive damages in special cases - they aren't very common.
The single biggest goal of tort reform is to put limits on the amount of noneconomic and punitive damages that judges and juries may award to injured people. A common figure suggested for a damage cap is $250,000 dollars. Most proposals for damage caps don't allow the juries to be told about the caps. Therefore, a jury may decide to award an injured person $500,000 dollars, but will not know that the person will only receive $250,000.