Do you know about compensatory damages in insurance?
Birthdays are expensive!! You read that perfectly right! If it is your son’s or daughter’s birthday, isn’t it expensive for you!! Especially when your teenager crosses eighteen, it can be even more expensive. They are eligible to get license once they cross eighteen and all that they want is a vehicle. Teenagers consider a bike as a style statement amongst their peers. However, parents always consider their age before denying their much-loved gift. Otherwise, which parent does not want to provide their kids something what they really love? The road mishaps happening around with teenagers make parents skeptical of buying a bike to the youngsters. Although it is parents’ responsibility to teach road etiquettes to teenagers, no parents deny the fact that youngsters are not composed always as they are in front of their parents. After all, it is their teenage and we all have come across that age and know the impulsiveness specific to that period. Probably, that’s why, we worry more.
This happens with me as well and finally, I decided to buy my son a bike with all the promises along. But before going for it, I want to make sure neither he suffers someone else’s mistake, nor he victimizes someone else with his irresponsible driving. I immediately approached one of the insurance agents who has been suggesting me insurance policies from long time. He came up with vast and good information which I am going to share with you now. There is something called compensatory damages in insurance arena. Do you know about compensatory damages in insurance? If your answer is ‘No’, then let me explain.
Compensatory damages in insurance are usually awarded in civil court cases where a plaintiff gets hurt due to the negligence or misconduct of another party because of which there is a monetary loss and physical damage. It is mandatory that the plaintiff has to prove the incurred loss in order to get the compensatory damages. It is essential to attribute the damage occurred to the defendant and it is the plaintiff’s responsibility. The quantum of loss occurred has to be addressed by the jury and it is the role of a plaintiff.
Compensatory Damages break down:
Many are often mistaken when it comes to compensatory damages as they start taking the punitive damages into consideration. Compensatory damages in insurance pay off over and above any physical loss or damage. It also means offering incentive coverage against repeating the activity that has potentially been the reason for plaintiff’s damage or loss. The usual comparison between the compensatory and punitive damages is quite debated on varied platforms especially in insurance industry. The advocates of tort reforms argue that huge losses above the actual loss incurred spur the total cost of healthcare. Compensatory damages are meant to compensate the plaintiff with decent money to cover the loss or damage caused by the defendant when the former files a lawsuit.
Compensatory damages can be categorized as two types:
Actual compensatory damages
General compensatory damages
Actual compensatory damages are designed to offer necessary amount to the plaintiff to replace what was lost. It does not relate to any succeeding losses. They include the following elements:
- Medical and hospital bills
- Treatment costs
- Ambulance charges
- Cost of Medicines, hospital disposables and prescription drugs
- Cost of nursing home care
- Physiotherapy charges
- Rehabilitation expenses
- Domestic service charges
- Medical equipment
- Lost wages or lost employment income
- Increased living expenses due to the incident
- Transportation charges
However, it is the plaintiff’s responsibility to prove that the monetary value claimed is equal to the losses and damages suffered due to the incident.
General compensatory damages are those estimates of losses and damages not comprising of the actual money expended. Usually courts use the Multiplier method, which aggregates the damages by multiplying the total of actual damages with a number that signifies the damage’s seriousness in levels. Some courts use the Per diem method which attaches specific monetary value to each day the plaintiff suffers and sums the value of all days together. Seldom, courts use a concoction of these two ways to calculate general compensatory damages.
General compensatory damages include the following elements:
- Mental agony due to the incident excluding the damage and losses
- Facial and physical disfigurement
- Future medical costs
- Future lost wages due to inability to work
- Physical pain and suffering due to long-term
- Loss of consortium
- Inconvenience due to lessened quality of life
- Loss of enjoyment in life due to the incident
- Loss of opportunity
Compensatory damages in insurance are usually levied in medical malpractice lawsuits, often for hospital bills, medicinal expenditures, rehabilitation expenses and compensation for lost incomes due to the incident. Few of the compensatory damages are tricky to analyze. For instance, the value of lost salary will be higher for an influential resident of the society in comparison with someone who is poor or jobless. So, this information has to be gone through before you buy your young ones a mighty vehicle. After all, it is not necessary that every drive is hit worthy but being preventive is always safe.