Texas Wrongful Death Damages Cap: Medical, Government, Punitive

The Texas wrongful death damages cap applies only in certain categories of cases, not to every claim. Medical malpractice suits, claims against government entities, and punitive damage awards each carry statutory ceilings. Most other wrongful death cases, including car crashes, truck wrecks, workplace fatalities, defective products, and premises liability claims, have no preset dollar limit on compensatory damages. Which caps touch your case depends entirely on who the defendant is and what kind of conduct caused the death.

Medical Malpractice Caps Are the Strictest

Medical malpractice wrongful death claims face the tightest limits in Texas law, and two separate statutes stack on top of each other.

Non-Economic Damages Under Section 74.301

Section 74.301 caps non-economic damages like mental anguish and loss of companionship. A single physician or individual health care provider faces a cap of $250,000 per claimant, no matter how many providers are named. A single health care institution, such as a hospital, also faces a $250,000 cap per claimant. When multiple institutions are named, each individual cap stays at $250,000, but the combined total for all institutions cannot exceed $500,000 per claimant.¹ Severity of the emotional harm does not change the number.

Total Damages Under Section 74.303

This is where many families get blindsided. When a medical malpractice claim involves a wrongful death or survival action, Section 74.303 imposes a separate cap on all damages combined, including punitive damages: $500,000 per claimant in 1977 dollars, adjusted upward for inflation using the Consumer Price Index.² Because the figure has been compounding since August 1977, the effective ceiling is considerably higher than the nominal $500,000.

Past and future medical care expenses are the one carve-out and sit outside the 74.303 cap.² Other economic damages, including lost future earnings, fall inside it. That distinction surprises families, because in non-medical wrongful death cases economic damages face no ceiling at all.

Government Entity Caps Are Firm Dollar Limits

The Texas Tort Claims Act waives sovereign immunity for certain negligence claims against the government, but only up to fixed amounts. These caps apply to all damages combined and cannot be exceeded regardless of how catastrophic the loss.

State government: $250,000 per person and $500,000 per single occurrence for bodily injury or death.³
Municipalities (cities and towns): $250,000 per person and $500,000 per single occurrence.³
Other local government units, including counties, school districts, and special districts: $100,000 per person and $300,000 per single occurrence.³

The “per occurrence” limit is the one that catches people off guard. If a school bus crash kills three children and the school district is liable, the total payout for all three families combined cannot exceed $300,000. Each family’s share comes from that shared pool, not on top of it. Individual recoveries can end up far below what a family would receive from a private defendant on identical facts.

Punitive Damage Caps Follow a Formula

Punitive damages (called “exemplary damages” in the Texas statute) punish especially reckless or malicious conduct rather than compensate loss. Section 41.008 caps them at the greater of $200,000 or two times the economic damages plus the non-economic damages awarded by the jury, with the non-economic portion of that formula capped at $750,000.⁴

A worked example: if a jury awards $400,000 in economic damages and $600,000 in non-economic damages, the exemplary damages cap is the greater of $200,000 or ($800,000 + $600,000), which is $1,400,000. The cap scales with the size of the compensatory award rather than functioning as a flat limit.

For a jury to award exemplary damages at all, the verdict must be unanimous on both liability and the dollar amount, a higher bar than a typical civil verdict.⁵ The jury never hears about the cap itself; the statute prohibits telling jurors that any limit exists.⁴

When the Punitive Cap Does Not Apply

The cap disappears entirely when the defendant’s conduct constitutes certain felonies. The list includes murder, sexual assault, aggravated kidnapping, injury to a child or disabled person, intoxication assault, intoxication manslaughter, and human trafficking, among others.⁴ Most of these offenses require that the conduct was committed knowingly or intentionally. Intoxication assault and intoxication manslaughter do not require that heightened mental state, which matters enormously in wrongful death cases involving drunk drivers because it removes the ceiling on punitive recovery.

Most Wrongful Death Cases Have No Statutory Cap

Car accidents, truck crashes, workplace fatalities, defective products, and premises liability claims carry no legislative cap on compensatory damages. Juries can award whatever amount the evidence supports for economic and non-economic losses, with no preset limit on mental anguish, lost future earnings, or loss of companionship.

“No cap” is not the same as “no limit,” though. The Texas Supreme Court held in Gregory v. Chohan (2023) that appellate courts must do more than ask whether a verdict shocks the conscience. A plaintiff has to show a rational connection, grounded in the evidence, between the injuries suffered and the dollar amount awarded.⁶ Juries cannot simply pick a number. Awards built on unsubstantiated anchoring, where an attorney suggests a damages figure tied to something with no factual connection to the case, are vulnerable on appeal. Adjusters and defense counsel know this, and it shapes settlement negotiations in every uncapped case.

Comparative Fault Can Shrink or Eliminate Any Recovery

Caps are not the only thing that reduces what a family actually collects. Texas follows a modified comparative fault rule: if the deceased person was more than 50 percent responsible for the incident that caused their death, the family recovers nothing.⁷

When the deceased was partially at fault at 50 percent or below, the award is reduced by that percentage. A $1 million verdict where the deceased was 30 percent at fault becomes a $700,000 recovery. The reduction applies to every category of damages, capped or uncapped. In practice, comparative fault disputes are where many wrongful death cases are won or lost at trial, because defendants push hard to shift blame to the person who is not in the courtroom to defend themselves.

Taxes on What the Family Receives

Compensatory damages for personal physical injuries or physical sickness are excluded from federal gross income under the Internal Revenue Code. The exclusion covers economic damages like lost earnings and non-economic damages like mental anguish when they arise from a physical injury or death.⁸

Punitive damages are the exception. The IRS taxes exemplary damages as ordinary income because they are not tied to compensating a specific loss, and the same statute that excludes compensatory damages carves punitive damages out of the exclusion.⁸ If a settlement includes both compensatory and punitive components, how the agreement allocates money between those categories directly affects the family’s tax bill. Getting that allocation right before signing is worth a tax professional’s review.

1
State of Texas. Texas Civil Practice and Remedies Code 74.301 – Limitation on Noneconomic Damages
2
State of Texas. Texas Civil Practice and Remedies Code 74.303 – Limitation on Damages
3
State of Texas. Texas Civil Practice and Remedies Code 101.023 – Limitation on Amount of Liability
4
State of Texas. Texas Civil Practice and Remedies Code 41.008 – Limitation on Amount of Recovery
5
State of Texas. Texas Civil Practice and Remedies Code 41.003 – Standards for Recovery of Exemplary Damages
6
Supreme Court of Texas. Sarah Gregory and New Prime, Inc. v. Jaswinder Chohan, et al.
7
State of Texas. Texas Civil Practice and Remedies Code 33.001 – Proportionate Responsibility
8
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness