How are fatal accident damages calculated?
Using the Personal Injury Guideline Calculation Model
Calculation of fatal accident damages explained
When a family member passes away, it has financial consequences for those left behind. For example, because income is lost, but also because survivors incur extra costs from that moment on. Certain costs will also decrease, such as living expenses or the deceased’s hobbies.
The primary goal of fatal accident compensation is to ensure that survivors can maintain their standard of living as it was before the death. There are two key questions involved:
- What financial resources remain available after the death?
- What is the financial need of the survivors to continue life as before?
The difference between what is available and what is needed broadly determines the fatal accident damages for the survivors.
How are fatal accident damages calculated?
When determining fatal accident damages, personal injury experts use a specialized tool: the Personal Injury Guideline Calculation Model for Fatal Accident Damages. This model (link: Personal Injury Guideline Calculation Model for Fatal Accident Damages) was developed to calculate accurate and fair compensation based on the needs of survivors after the loss of a loved one. Nibud has also published a Financial Guide for Survivors.
Step 1: Determining financial need. The net disposable (consumptive) household income without the death is determined according to the Nibud definition and then reduced by a fixed percentage of discontinued normative expenditures. This leads to the determination of the family’s financial need after the death. The percentage of discontinued expenditures depends on the family composition, the household income, and the number of family members in combination with the ages the children would have been without the death.
Calculation example
With a net household income of €36,000 for a family with two children (aged 11 and 13), 16.6% of expenditures lapse after the death according to Nibud. That amounts to €5,976. The financial need of the survivors is then €30,024 (€36,000 minus €5,976).
Step 2: Determining income after death. We inventory the net disposable (consumptive) household income of the survivor(s) based on the Nibud definition.
Step 3: Determining discontinued expenditures (e.g., mortgage costs and expensive hobbies) and additional expenditures (extra childcare costs). The discontinued expenditures increase the net disposable (consumptive) household income after death and thereby reduce the financial need. The additional expenditures reduce the net disposable (consumptive) household income after death and thereby increase the need.
Step 4: Calculation of annual family loss. Once the need (Step 1) is determined, it is reduced by the income after death (Step 2), reduced by the discontinued expenditures, and increased by the additional expenditures. What remains is the family’s annual financial loss. We project this annual loss over a certain period into the future.
Every situation is unique
Although this calculation method uses standard norms such as those from Nibud, every situation is assessed individually to determine accurate compensation for fatal accident damages.
While every situation is unique, the calculation model provides a solid framework for reaching a fair agreement with an insurer. It also significantly accelerates the damage calculation process.
Factors of Fatal Accident Damages in the Calculation Model
The example above is very general. In practice, the calculation model weighs various factors, such as:
Loss of Income: The lost income of the deceased.
Compensations: Possible benefits such as life insurance and pensions (widow’s or orphan’s pension) that provide financial support.
Reduced Costs: Although difficult to imagine, the death of a family member can also lead to lower daily costs.
Future Needs: The model also projects future changes, such as the children’s education or the family’s need to relocate.
Role of the Deceased: The deceased’s contribution to household tasks or childcare and the possible need to outsource these services after the death.
Professional Guidance for Fatal Accident Damages
For survivors facing the complexities of fatal accident damages, we offer professional support and free guidance. Our team of experienced fatal accident damage experts is ready to lead you through the process and ensure just compensation. Contact us via our contact form or call us directly at 085-1308965 for more information.
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