Insurers generally begin settlement evaluation of death claims with special damages (economic losses). They then consider the general damages (pain and suffering) allowed under the appropriate wrongful death statute. All states have wrongful death statutes governing who may make a claim for the wrongful death of another, and what damages they may recover. Some states are considerably more restrictive than others on what may be paid. Usually, these claims involve the loss of support and/or loss of consortium.
A decedent’s survivors or beneficiaries usually claim that the death resulted from the defendant’s wrongful acts. The claim is not for the early death of the decedent, but rather for the wrong done to the heirs or beneficiaries. Negotiations often involve lost earnings, loss of support, and loss of consortium. In some instances carriers agree to structured settlements (periodic payments) to cover a dependent child’s education, or to provide regular income over a survivor’s lifetime. They also, at times, agree to other creative solutions, such as helping a surviving spouse start a business or buy a home.
Sex of the deceased
Sex of the insured still serves as an index to future earnings in many cases, particularly when used in conjunction with education, training, and job or profession. Often the male parent provides for the children’s education, support, and comfort. Accordingly, a higher value may follow the death of a male parent than a female parent, although this requires careful consideration in the present environment. The loss of companionship, affection, and guidance applies to the loss of either parent, but is very difficult to express in monetary terms.
Age of the deceased
Life expectancy influences the value of potential future earnings. The younger the decedent, the longer wage earning period remaining at death. This clearly affects the potential loss to the survivors. Problems arise with very young decedents who had developed few work skills and had no clear cut earning level at time of death. Older people may have shorter life expectancies, but they have attained more of their career goals and have typically developed a higher wage rate than their younger counterparts. Future earnings projections often create one of the more difficult evaluation questions in the wrongful death claim. Carriers typically take a much more conservative view than plaintiffs.
The statutes ordinarily allow a spousal claim for wrongful death only from a person legally married to the decedent. Some jurisdictions recognize “common law” spouses and allow recovery when this person lived with the decedent and the parties represented themselves as husband and wife. A few jurisdictions may recognize claims for loss of partners of the same sex. The insurance company must determine if the survivor was a legal spouse as a condition for a settlement. Carriers may compromise a wrongful death case when the status is unclear. Absent a specific court ruling on the issue, marital status creates a major problem where more than one person claims to be the surviving spouse. In one case, three women claimed to be the decedent’s widow. The carrier felt that the evidence supported a valid marriage only to claimant #2. They sought nominal settlements with claimants #1 and #3, however, to avoid further legal action. Their other option consisted of a court approved settlement.
An insurance company or self-insured defendant considers these factors in any claim alleging that the claimant was a dependant of the decedent:
- 1) Whether claimed dependency was partial or total;
2) Term of the dependency, had death not intervened;
3) Closeness of the relationship between deceased and the claimant;
4) Cost of deceased’s maintenance had he lived, e.g., cost of food, clothing, transportation, and other relevant expenses;
5) Status of claimant.
Carriers often make a combined offer to settle all claims of surviving adult children, allowing them to divide the proceeds. Generally, the greater the degree of dependency, the higher the evaluation. Adult children tend to be less dependent than minors. Age also influences values of minor claimants. The length of the projected dependency is much greater for younger children than those nearing the years when they could be emancipated. Carriers may overlook the heavy expenses for education, transportation, clothing, and other necessities for the older teen.
Surviving spouses may demand indemnity equal to what would have been needed to support him or her in the manner to which he or she had become accustomed during the decedent’s lifetime. The spouse may also seek compensation for loss of the deceased’s love and companionship.
Claims by dependent parents are handled the same as other dependents on the basis of partial or full dependency limited by the parent’s life expectancy. Nondependent parents are usually evaluated much the same as adult children. The degree of association with the decedent is determinative. A parent’s claim will be evaluated more highly where there is a significant loss of society, e.g., the deceased child frequently visited the parent, helped with household tasks, and in other ways demonstrated love and devotion. In contrast, an ignored parent, with infrequent or rare contact between deceased child and parent, yields a much lower evaluation. In cases involving parent claims, the plaintiff should demonstrate actual cash remittances by the deceased to the parents, and the cash value of services performed—for instance, the cost of a gardener. The closeness of the relationship can be shown by greeting card exchanges, photographs of family gatherings, and where necessary, by testimonials of friends and neighbors.
Occupation and earnings
The carrier explores the decedent’s earnings history and future prospects had death not intervened. Wage earners with a demonstrated track record of salary increases, promotions, etc. in a well-established industry usually present no great problem. Proof of these elements may include testimony from deceased’s superiors about the likelihood of future promotions, company expansion, industry salary trends, and the like. Greater problems arise when the case involves a person with a sporadic work history. Trade unions may assist regarding work trends, frequency of hire, and usual earnings. Cases of recent graduates, who have not yet established their careers, often require consultation with vocational specialists who can comment on the marketability of the deceased’s skills.
Funeral expenses are normally a minor part of the evaluation compared with loss of earnings and other factors; however, they are part of the equation.
Loss of consortium
This element creates the largest single item of damages, except for loss of earnings, in the wrongful death case. It involves setting a value on the loss of companionship, affection, etc.
Resident alien cases are evaluated on the same basis as citizens of the United States. The measure of damages becomes more complicated with nonresident alien survivors. The insurance carrier usually bases its evaluations in these cases on the wrongful death statutes of the alien’s country of citizenship or residence.
As in other types of injury, the carrier evaluates the case on the basis of the projected loss to the survivors. It then discounts the value, based upon its opinion of the liability against its insured.