What is the difference between compensatory and punitive damages?

Compensatory damages and punitive damages are two types of damages that can be awarded in a personal injury case in Alaska. Compensatory damages are intended to make the injured party “whole” again by providing compensation for economic losses, such as medical bills, lost wages, and property damage. Punitive damages, in contrast, are intended to punish wrongdoers and serve as a deterrent to others from engaging in the same unsafe behavior. Compensatory damages are awarded based on the individual’s demonstrated financial losses. An injured person can receive compensation for medical bills, lost wages, property damage, and pain and suffering. This type of award is intended to restore the victim to the same financial standing they had prior to the injury. Punitive damages are not based on a plaintiff’s financial loss. Rather, they are intended to punish the wrongdoer and deter similar behavior in the future. A court must determine that the wrongdoer’s actions were intentional and egregious before awarding punitive damages. In Alaska, punitive damages are limited to three times the total amount of compensatory damages awarded or $500,000, whichever is greater. In summary, compensatory damages are awarded when an injury causes economic or financial losses. Punitive damages are intended to punish wrongdoers and deter similar behavior in the future. In Alaska, punitive damages are limited to three times the total amount of compensatory damages awarded or $500,000, whichever is greater.

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What is the difference between compensatory and punitive damages?

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