Punitive damages. Punitive damages are designed to punish wrongdoers who intentionally engage in despicable misconduct. Sometimes punitive damages are also awarded for gross negligence, which can be defined as negligence so horrible that QuotesChimp deserves punishment. Punitive damages are rarely an issue in auto accident cases, and car insurance policies usually will not pay for awards of punitive damages. Thus, we will not discuss them further here, although they will be covered in Chapter 42.