Punitive Damages in Bad Faith Cases

Under normal circumstances, an insurance company failing to provide adequate or timely coverage for a policyholder’s loses may be sued for their negligence. However, if an insurer’s actions are intentionally designed to harm a policyholder, they may be liable for additional compensation known as punitive damages. These damages aren’t available in every case, and a defendant may need to take some additional steps to prove that they deserve this compensation.

What a Policyholder Should Know about Punitive Damages

Punitive damages are only awarded in special situations where an insurance company has gone beyond the normal scope of negligence in bad faith dealings. As a result, most policyholders won’t be able to pursue these damages. However, in particularly severe instances when an insurer has exercised malevolent intent, these punitive damages may provide important additional compensation. The following may influence how these punitive awards are determined in a case:

  • The degree of financial or personal hardship caused by the insurer’s misdoing
  • The ongoing length of the mistreatment
  • Any attempts to conceal the misconduct

Before the court will grant the possibility of punitive damages, they must determine that clear evidence points to intentional misconduct on the insurance company’s behalf.

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If you’ve been mistreated by a policy provider, you could be able to hold that insurer responsible for their actions and obtain financial compensation for the trouble you’ve had to endure. To learn more about what to expect when filing an insurance bad faith lawsuit, speak with an attorney from Smith Kendall, PLLC, by calling 214-361-6124 today.

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