Mitigation of Damages

The term mitigation of damages in insurance claims refers to the injured party’s obligation to use reasonable care to avoid exacerbation or worsening of the damage or injury. Not only is a damage mitigation clause usually included in automobile insurance policies, but they are recognized in the legal Court system. The injured person’s failure to take protective measures after suffering the damage or injury could actually reduce the amount of compensation that they are entitled to. This concept is sometimes referred to as the avoidable consequence defense, acknowledging the idea that the claimant or plaintiff could have avoided the compounded damages or injury which were the consequence of their own doing.

This does not mean that the injured person should seek the cheapest medical treatment available, or that they should return to work immediately. It actually means that the injured person should seek treatment so that their injury does not worsen. If the lack of treatment causes the injury to worsen, the tort-feasor (the person at fault) only owes compensation for the original injury.

Consider a case where an automobile case leaves a young woman with a long laceration on her arm. She might seek treatment at an emergency room where she is told that she will need a few stitches and should suffer no residual scarring. She is afraid of needles, so she leaves the emergency room to go home and put a little band-aid on her cut. Months later, she is left with an ugly scar where her laceration failed to heal properly. The tort-feasor’s insurance company owes her for her initial treatment and the laceration, but it was the young woman’s own actions (or lack of them) left her badly scarred so it would be unfair to require the tort-feasor to compensate her for that also. She failed to mitigate her damages.

In the case of vehicle damage, the mitigation of damages clause requires the owner to take steps to ensure that further damage does not occur regardless of whose fault the accident was. If a vehicle is rendered non-driveable, it needs to be towed from the scene. Vehicle repairs need to begin as soon as reasonably possible so that rust does not occur or, in cases where window glass is broken, rain does not damage the vehicle interior.

The tort-feasor’s insurance company owes for the damage the accident caused, not for damage caused by subsequent neglect. Waiting for the insurance company to make decisions regarding coverage and/or which driver was at fault for an accident is not an excuse. Damages can also include the rental car expenses or storage fees caused by the owner’s lack of effort to begin the vehicle repairs.

This article is written for informational purposes and is not intended to take the place of competent local legal advice.

Other articles regarding negligence and liability issues:

An Explanation of Assumed Risk or the Assumption of Risk

The Boulevard Rule Explained

The Insurance Claims Process Explained

Comparative Negligence Laws Explained

Contributory Negligence Laws Explained

The Intentional Act or Intentional Injury Exclusion Explained

The Joint and Several Liability Rule

The Last Clear Chance Rule Explained

Negligent Entrustment

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