Someone died in car accident? Here is 3 Step formula to count how much amount insurance company will have to pay.
This is for education purpose only.
When anyone dies in motor vehicle accident, Supreme Court has prescribed formula as per which, compensation can be calculated:
Step 1 : Find out three facts. A) age of person who died in a accident. B) Annual Income of diseased. Add if there is any additional incomes C) How many person lived on income diseased. - dependants.
Step : 2 : From the income B) deduct his/her own regular personal expanses as per chart below
1) Deduct 1/3 of income if there were 2 to 3 dependants
2) Deduct 1/4 of income if there were 4 to 6 dependants
3) Deduct 1/5 of income if there were more than 6 dependants.
After Deduction, the Net Annual Income will be X.
Step 3 : Now Calculate as per following formula:
1) For Age group of 15 to 25 : Multiply X Amount ( As per Step 2) with multiplier of 18. The end result will be compensation for loss of income of diseased.
2)For age group 26 to 30 years; Multiply X with 17
3) For age group 31 to 35 years : Multiply X with 16
4) For age group 36 to 40 years : Multiply X with 15
5) For age group of 41 to 45 years : Multiply X with 14
6) For age group of 46 to 50 years : Multiply X with 13
7) For age group 50 to 55 years : Multiply X with 11
8) For age group 56 to 60 Years : Multiply X with 9
9) For age group 61 to 65 Years: Multiply X with 7
10) For age group 66 to 70 years: Multiply X with 5
There are some other minor additions. But by and large above formula decides compensation payable by insurance company
- Haresh Raichura
2/7/2013
