Punitive Damages Against An Insurance Company: What are they? Can I get them?

Punitive damages or “Punies” as we call them, are just as the name implies – a punishment. It’s when the court, either a judge or the jury, decides that the conduct of an insurance company, when dealing with the policyholder, is so unfair and outrageous they will award damages above and beyond the actual claim.

Punitive damages are meant not only to punish but to act as a deterrent, discouraging that company and other insurance companies from acting in a similar manner. Punitive damages are meant to send a message. Regrettably, these damages are rare in Canadian courts. One of the reasons is that most cases settle before reaching trial and it is only at trial that an insurance company will be ordered to pay punitive damages. No insurance company will acknowledge paying punitive damages on a settlement. Another reason punitive damages are so rare is that the insurers are usually well aware when they could be facing a punitive damage award. They therefore have what could be termed as a “get out of jail free card” and that card is not surprisingly, money. Insurance companies know that regardless of how they have treated their policyholder there is only one place where they can be held accountable for their conduct and that place is the courtroom. All it takes to avoid that courtroom is money. How much money? That often depends on who is representing the policyholder.

Insurance companies know who the trial lawyers are. Singer Kwinter has succeeded in winning punitive damage awards for its clients against insurance companies on four – yes four separate occasions. We are the only law firm in Canada to have done so.