Accident Severity
What Does Accident Severity Mean?
Accident severity determines both the premium for the insurance that covers accidents and the amount of compensation the insurance company will provide to the policyholder in the event of an accident.
Insuranceopedia Explains Accident Severity
When the policyholder experiences an accident, the insurance company conducts an initial assessment of how much it can pay out based on medical reports and records. These documents help the company determine the severity of the accident, classifying it as either minor or major.
Visible bodily damage is more likely to be considered major. If the damage is not visible, the insurer relies on x-ray reports or laboratory test results to assess the extent of the injury and the severity of the accident.
The insurance contract may specify that coverage for a particular accident is tied to a specific premium payment.