Reinsurance tutorials #12
What is bodily Injury?
The insured may cause or be involved in bodily injury claims suffered by a third party. They may be then found liable because of their negligence, their fault or even because they are simply involved (with no fault) in the accident. Considered as liable, they must compensate the third-party victim or claimant.
A bodily injury is physical and/or psychological, temporary and/or permanent. The bodily injured is entitled to claim full compensation from the liable third party, who might be a driver, an employer or a doctor, for example.
Full compensation is a guiding principle in the compensation of bodily injuries and concretely means that the person responsible for the injuries must compensate the loss in its entirety; and solely the loss, without privation or enrichment of the victim.
From a global perspective, we meet the same head of damages to compensate bodily injured victims or their families, more or less detailed according to the European market: actual or future medical expenses, past and future loss of income, care, case management, house fitting, car fitting, disability, general damages.
In some countries, the Law specifies the scale to be applied in order to calculate the losses. This is the case in Spain or Italy for small bodily injury damages. Compensation may be awarded in lump sum or annuities. Liable parties can be covered by their insurance policy (motor, employer, medical, private household, or commercial insurance) which will intervene up to a limit pre-determined in the contract. This limit can be expressed by person or by accident. Motor Third Party Liability Insurance coverage can be unlimited.
Severe bodily injury claims are mostly transferred to reinsurance through an excess of loss treaty. CCR Re has historical knowledge and experience on this business. CCR Re built a database tracing the development of estimates of bodily injury damages sustained by traffic victims of a value greater than or equal to one million euros. In 2019, CCR Re published its 3rd study on Severe Motor Bodily Injury compensation in France, sharing its experts’ analysis of trends observed since 2005. I invite you to discover this study which is downloadable on CCR Re’s website.
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