There is no question that under California law, plaintiffs in insurance bad faith cases are legally entitled to seek punitive damages. “The availability of punitive damages allegations [in a bad faith case] is thus compatible with recognition of insurers’ underlying public obligations and reflects an attempt to restore balance in the contractual relationship.” 20th Century Ins. Co. v. Superior Court, (2001) 90 Cal. App. 4th 1247, 1265-1266, Citing Egan v. Mutual of Omaha Ins. Co., supra, 820.
The purpose of punitive damages is to punish the defendant, to make an example and to thereby deter others from similar conduct. (Neal v. Farmers Ins. Exchange (1978) 21 Cal. 3d 910, 928.
Punitive damages are appropriate whenever an insurer’s conduct in the handling of Plaintiff’s claim exhibits malice, oppression or fraud.
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