In property damage claims, how is the amount of recoverable damages typically calculated?

The correct method for calculating recoverable damages in property damage claims is based on the fair market value of the property before and after the damage occurred. This method assesses the diminution in value caused by the harmful event. The fair market value is determined by considering what a willing buyer would pay a willing seller for the property in its damaged state, compared to its value before the damage.

This approach ensures that the plaintiff is compensated fairly for the loss in the property's value rather than just for repair costs or replacement costs, which might not reflect the true economic loss sustained due to the damage. By focusing on fair market value, the calculation aligns with concepts of loss in the market context, providing a more accurate measure of damages.

Other options like using the cost of repairs or replacement costs may sometimes be included in the overall assessment, but they do not fully capture what a property owner has truly lost in terms of market value. This is particularly important in cases where repairs exceed the property’s pre-damage market value or where the property may not be restored to its original condition. Thus, determining the fair market value before and after the damage provides a clearer and more comprehensive view of the economic impact on the property owner.