Compensatory damages are damages meant to compensate. They pay you back for your actual losses. In some states, compensatory damages may cover only actual economic losses, like medical bills and lost income. In others, compensatory damages may include compensation for things like pain and suffering and loss of enjoyment of life.
The purpose of compensatory damages is to put you as nearly as possible back in the position you would have been in had the defendant's negligence not occurred. Punitive damages, on the other hand, are intended to punish the defendant and to discourage others from engaging in the kind of negligence involved in your case.
Some states have eliminated or “capped” punitive damage awards. Where they are allowed, an award of punitive damages typically requires a showing of something more than mere negligence.
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