Determining the Value of Past Lost Insurance

In personal injury tort and employment discrimination actions, damages can be claimed for lost medical, dental, vision and life insurance. Provision of insurance by an employer can be an important part of fringe benefits provided to employees in addition to money earnings lost because of an injury. Future lost insurance, either as a part of lost earning capacity or part of ‘‘front pay’’ can be replaced and are not the subject of this paper. Past lost insurance, however, cannot be replaced because the time during which the insurance would have had value has passed, raising the question of methods for valuing a benefit that no longer is needed. Courts have wrestled with the question of how to value past lost insurance. Courts have arrived at three possible answers: (1) determining the out-of-pocket costs borne by a personally injured plaintiff because the plaintiff did not have the lost insurance; (2) determining what would have been the market cost for replacing the past lost insurance; or (3) determining the cost to the employer of providing the insurance that was not provided because of the injury or termination. Defendants have generally preferred the first method, while plaintiffs have generally preferred one of the second or third methods. The purpose of this paper is to elaborate on the three methods and to provide a sampling of what the courts have said about this issue. The primary emphasis of this paper will be on medical insurance, but one important court decision involving life insurance will also be discussed.