In the legal system of the Islamic Republic of Iran, which is founded upon Shiʿi jurisprudence, the primary principle in compensating damage inflicted upon an injured party is full compensation for the loss. However, Note 3 of Article 8 of the Compulsory Third-Party Insurance Law limits the tortfeasor’s liability to the amount of damage corresponding to the most expensive conventional vehicle. This research critically examines the jurisprudential foundations of Note 3 of Article 8 of the Compulsory Third-Party Insurance Law enacted in 2016, which restricts the tortfeasor’s liability to damage equivalent to that of the most expensive conventional vehicle. By analyzing jurisprudential doctrines such as the rule of destruction (qaʿidat al-itlāf), the rule of assumption of risk (qaʿidat al-iqdām), and the principle of preserving public order (ḥifẓ al-niẓām), it is concluded that limiting liability can only be justified by reference to a ruling of the sovereign authority (ḥukm al-ḥākim). The research adopts a descriptive–analytical methodology and is based on sources from Imāmī (Twelver Shiʿi) jurisprudence.