extracontractual damages
Damages that are in addition to or outside of a contract of insurance. Extracontractual
damages are awarded in "bad faith" claims against insurance companies. They
are a form of punitive damages, intended to punish extreme insurer conduct.
Extracontractual damage awards most frequently arise from unfair claims handling
practices (e.g., unjust denial of coverage, failure to settle a claim within
policy limits). See also Bad faith.
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PLI XV.T