In coastal cities, sure. But in a lot of parts of the country it’s not. Also, as others have noted, different jurisdictions may have higher limits. But to go

In coastal cities, sure. But in a lot of parts of the country it’s not. Also, as others have noted, different jurisdictions may have higher limits. But to go to civil court to recover $20,000 just isn’t worth it. Your legal expenses will be significant and you face the prospect of losing or being unable to collect. So by limiting your potential damages you don’t incur litigation expenses, spend less time and stress on it and your net return may be similar. What’s better? $5,000 it costs you nothing to get a judgement for (other than a nominal filing fee) minus 10-20% for the collection agency or $20,000 you may need to spend $10-20K to litigate?