Which type of damages includes medical expenses and lost wages?

The correct choice identifies special damages as the type of damages that encompass medical expenses and lost wages. Special damages are awarded to compensate a plaintiff for actual out-of-pocket expenses that can be directly quantified. This includes costs such as hospital bills, rehabilitation expenses, and lost income due to an inability to work following an injury.

In the context of property and casualty insurance, understanding special damages is crucial because these amounts can be clearly documented and are quantifiable. This distinguishes them from other types of damages like punitive damages, which are intended to punish the wrongdoer rather than compensate the victim, and general damages, which refer to non-economic losses such as pain and suffering, emotional distress, and loss of enjoyment of life — these are more subjective and not as easily expressed in dollar amounts. Compensatory damages, while they can include both special and general damages, specifically refer to awards meant to make the victim whole again, rather than just focusing on the categories of expenses incurred.