Evaluation of the benefits costs to cover the needs arising from personal injury

The source of a personal injury can be e.g. a road traffic accident, a work accident, medical malpractice, etc. This article will focus on determining the financial impact of personal injury. In particular, the cost of victim treatment will be estimated and also the capital to cover increased needs after accident. Such calculations are essential for the proper management of the financial effects of personal injury in the victim's household. Grounds for such a claim are civil law, which is applicable in European countries to a similar extent. If an accident victim has suffered bodily injury, the person who has caused the accident should provide the injured person with funds to cover their increased needs. The increased needs, which might arise for an accident victim, include for instance: additional costs of medical appointments, travel to health facilities, medicines and medical equipment, physical therapy, special diet, care and also: loved ones’ travels to the hospital and employment of a housekeeper. The aim of this paper is to present a possible methodology for capital valuation, corresponding to the impact of personal injury on the basis of an actuarial account. Knowledge of the current value of such capital (annuity) is important for the person who is to pay it (e.g. an insurer). The victim may also want to know the present value of the annuity, because it can be change in the case of a one-off payment. The article includes a proposal to use an actuarial pension to assess the costs that arise as a result of personal injury. The article focuses solely on the costs of treatment and rehabilitation. The examples contained in this article show what high costs are generated by personal injury. In addition, the article mentions a number of significant differences in treatment costs in the EU. Being aware of these differences is important because the damage to a person can be related to the citizens of EU countries (especially if one considers motor vehicle liability insurance).