Page 291 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

dependency amount of what the deceased would have
spent on the dependants by the commonly accepted
multiplier of 12 to 15, which is known as year purchase
factor.

This method takes into account not only the discount
for arriving at the lump sum amount of the benefit
spread over number of years but also discount for other
contingencies and imponderable which necessarily
enter into such calculations.

The commonly accepted multiplier of the years purchase
factor varies from 12 to 15. It is this method, which has
been approved by the Supreme Court in various cases.
Occasionally another method is used to arrive at the
quantum of damage. This is called Nance's method,
under which, the amount of basic dependency is
multiplied by the figure expected useful life of the
deceased.

Then a proper discounting has to be done on two grounds,
namely a discount for arriving at the sum amount of the
benefit spread over a number of years and a further
allowance (discount) has to be made because for the
uncertainties on account of the premature death or
remarriage of the widow, acceleration of other interests
in estate, etc.

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