Texas Property and Casualty License Practice Exam

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Study for the Texas Property and Casualty License Exam. Engage with flashcards and multiple choice questions, and receive hints and explanations with each question. Prepare confidently for your exam!

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Which type of damages serves as both compensation and a deterrent against future negligence?

Punitive Damages
Compensatory Damages
General Damages
Specific Damages

The correct answer is: Punitive Damages

Punitive damages are designed not only to compensate the injured party for their losses but also to serve as a deterrent against the wrongdoer's future negligence or wrongful conduct. This type of damage goes beyond mere compensation for actual losses (such as medical expenses or lost wages) and aims to punish the offender for particularly egregious behavior. By imposing punitive damages, the legal system sends a message that certain actions, especially those that are reckless or intentional, are unacceptable and will be met with significant financial consequences. This dual purpose makes punitive damages a critical tool in promoting accountability and encouraging individuals and corporations to adhere to standards of care that prevent harm to others. In contrast, compensatory, general, and specific damages focus primarily on making the injured party whole again without the added aspect of deterrence.