The insured victim effect: When and why compensating harm decreases punishment recommendations

An insurance policy may not only affect the consequences for victims but also for perpetrators. In six experiments we find that people recommend milder punishments for perpetrators when the victim was insured, although people believe that a sentence should not depend on the victim’s insurance status. The robustness of this effect is demonstrated by showing that recommendations can even be more lenient for crimes that are in fact more serious but in which the victim was insured. Moreover, even when harm was possible but did not materialize, people still prefer to punish crimes less severely when the (potential) victim was insured. The final two experiments suggest that the effect is associated with a change in (1) compassion for the victim and (2) perceived severity of the transgression. Implications of this phenomenon are briefly discussed.