Insurance company not paying punitive damages?
Should insurance pay for punitive damages? Many say that they should. But in reality we believe that insurance polices should afford any coverage for punitive damages. Punitive damages are those damages that a court awards to punish or to deter that conduct.
In our endeavors when looking at car accidents, we are looking at those cases where a person is extremely negligent. Those cases were the person that causes the damage is drunk, under the influence of alcohol, not respecting any posted traffic signals or anything like that. So much negligence that the court should punish this person.
But what is the objective of punishing someone if their insurance company will turn around and pay or bail them out. Punitive damages objective is to deter the conduct. If the insurance company is paying on behalf the offender, nothing is accomplished, other than everyone’s premium payments would go up.
Do not take us wrong, insurance company should afford coverage for what they owe, however, in the advent of tort reform we believe that punitive damages is one of those issues that the insurance company should be responsible for, especially if they are excluding it from the auto policy.
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