How To Claim Road Accident Compensation (Part 3) – Calculating Compensation

By Akosha

Updated: Wednesday, October 9, 2019, 17:46 [IST]

Methods Of Calculating Compensation

After holding inquiry, the Tribunal will make an award determining the amount of road accident compensation which appears to be just. The tribunal takes into account the actual loss which arose out of the accident which includes hospital expenses, lost income during treatment period etc. In case of death, it is primarily the loss of dependency that determines the road accident compensation amount. This is calculated using multiplier method which is an exercise involving factors such as number of dependants, age of the deceased, nature of his profession, future prospects of the deceased, age of the claimants etc; and hence is not explained here. For instance in case where a person aged 23, earning income of around Rs. 3,000 per month doing business met with an accident and died, the road accident compensation of Rs. 4,17,500 was given. Similarly in another case where an MBA graduate earning Rs. 18,000 per month died and Tribunal awarded an amount of Rs.24, 65, 000 though the Madras High Court found the amount to be exorbitant and reduced it later to Rs.15,14,000.

Where an accident victim is a housewife the Tribunal will first do the evaluation of her gratuitous services and will arrive at a notional income on the basis of this notional income compensation will be calculated. In one of the latest judgment where a housewife suffered injuries, the court awarded road accident compensation of Rs.1,45,129.

In case of accidents involving death or permanent disablement, the Act also provides for a structured formula for calculating compensation in its schedule. It is for the claimant to decide whether to claim compensation based on the formula given in the schedule. The advantage of opting for this procedure is that the claimant is not required to prove negligence or fault of the respondent and thus the liability of the owner is on 'no-fault" basis. However, the disadvantage is that the claimant cannot claim for compensation simultaneously (above, Rs.50000 in case of death and Rs. 25000 in case of permanent disablement). Further, the structured formula in the schedule does not contemplate for calculating compensation for earnings above Rs.40000 annually.

Hit And Run Cases

A 'hit and run" motor accident means an accident involving a motor vehicle whose identity cannot be ascertained (for instance, a car hits a pedestrian and speeds away). In such cases, it is unfair to deny compensation to pedestrian on the ground that the respondent cannot be identified. Therefore, the Act empowers the central government to make a scheme to pay compensation in such cases. Accordingly, a victim of 'hit and run" accident can file an application before the claims tribunal to claim compensation and once the Tribunal has allowed the application, the General Insurance Corporation is liable to pay to the claimant a fixed road accident compensation of Rs. 25,000 in case of death and Rs. 12,500 in case of grievous hurt. Thus the amount allowed under a hit and run case is meager as compared to a regular claim petition.

Have we missed out on anything? Have you gone through a similar experience? Share your experience with us at [email protected]