Compensatory Vs. Punitive Damages: What’s the Difference?

Sure, accidents happen. But sometimes, it isn’t just an accident.

What this person did in your car accident was nothing short of negligent. Your physical injuries are severe, and the medical costs will be excessive. 

Luckily, compensatory and/or punitive damages might be an option for you.

But what are punitive damages, and how do they differ from compensatory damages? What are compensatory damages, for that matter?

This guide will explain both—and highlight the differences between the two.

With the help of a dedicated injury lawyer from Hess Injury Law, you have the legal right to hold the party responsible for your losses if you suffer due to their negligence. 

A personal injury attorney could assist you in getting the money you and your family need to adapt to your new situation.

Compensatory Damages

In understanding compensatory vs. punitive damages, let’s first talk about the type of damages we are accustomed to—compensatory.

As their name suggests, compensatory damages compensate victims for actual, quantifiable loss or harm. As much as money can, compensatory damages—also called actual damages—are intended to help victims return to life before the injury. 

Awarding Compensatory Damages

Paying compensatory damages is generally the responsibility of the defendant’s insurance provider in a personal injury lawsuit. 

The at-fault party must cover current and future medical bills if the plaintiff suffered long-term injury or permanent incapacity. 

Compensatory damages cover the plaintiff’s property losses, such as money needed to fix or replace their car or any other personal property lost or destroyed in the collision. 

In personal injury cases, courts frequently consider lost wages/income, necessarily incurred expenses, and the damaged property’s market value when determining compensatory damages. Non-economic damages—such as pain, suffering, emotional distress, PTSD, and loss of sleep—should also be included in a personal injury settlement or court verdict. 

An experienced personal injury attorney will help you secure maximum compensation for the other person’s negligence.

The Difference Between Compensatory and Punitive Damages

In addition to compensatory damages, the Court in many states (including Oregon) can award punitive damages.

Punitive damages—usually referred to as exemplary damages—are paid in personal injury cases. Still, they are only awarded after it is established that compensatory damages are due.

Unlike compensatory damages, punitive damages aren’t given out as frequently. 

What Each Type of Damages Covers

When the Court calculates punitive damages, it is not calculating your medical expenses or property damage. Instead, the Court thinks about the defendant’s conduct.

Think of the Court as a strict parent who punishes the defendant, so they think twice about their negligent behavior in the future. 

Punitive damages are granted to punish flagrant or extreme misconduct on the defendant’s part. 

Punitive damages are awarded for different reasons.


Punitive damages may be utilized to penalize a defendant who acts grossly negligent toward the plaintiff, even if jail is not an option for punishment in civil disputes. 


Punitive damages can discourage the person in question, other people, and organizations from committing the same kind of wrongdoing the defendant was found guilty of. 

Speak to your personal injury lawyer to find out if your case is one where the Court is likely to pay punitive damages.

The Standard for Compensatory and Punitive Damages

In a personal injury lawsuit, the plaintiff must show that the defendant acted differently than a reasonable person did under the same or similar circumstances to receive compensatory damages.

On the other hand, to receive punitive damages, a plaintiff must typically demonstrate that the defendant either acted recklessly or grossly negligently. 

According to Oregon state law:

“Punitive damages are not recoverable in a civil action unless it is proven by clear and convincing evidence that the party against whom punitive damages are sought has acted with malice or has shown a reckless and outrageous indifference to a highly unreasonable risk of harm and has acted with a conscious indifference to the health, safety, and welfare of others.”

So you see, the courts award punitive damages when a higher standard is met. Not every personal injury claim will meet this standard.

Contact an Experienced Attorney to Help With Your Personal Injury Case

Unfortunately, accidents result in serious injuries, damage to mental health, and even expensive property damage. 

Our personal injury attorneys have experience navigating the complex legal system and negotiating with combative insurance adjusters. Let us work with you to evaluate the merits of your claim and pursue the legal action required to secure compensation for you. 

Contact Hess Injury Law for a free consultation to discuss your claim and learn more about how we can help you.

Disclaimer: The content of this blog is for informational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for professional legal counsel.

Author Bio

Peter J. Hess grew up in Walla Walla, Washington. He is a 1996 graduate of Walla Walla High School and a 2000 graduate of the University of Washington, with a B.A. in Business Administration/Information Systems.

Peter graduated from Willamette University College of Law, with honors, in 2007. While at Willamette, he was an Associate Editor of the Willamette Law Review, he was a Teacher’s Assistant for a Legal Research and Writing professor, and he worked as a Personal Injury Law Clerk at Swanson, Lathen, Alexander & McCann in Salem, Oregon. After graduation from Willamette, Peter began working here at Hess Injury Law. In 2012, he became a partner in the firm. He is licensed to practice law in both Washington and Oregon.

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