If you are in a motor vehicle accident and submit a claim to your auto insurance provider, a significant part of the process will be demonstrating the loss that you have suffered as a result of the accident. In this article, we explain the meaning of the term “loss” in the context of law, insurance, and motor vehicle accidents. 

Key Takeaways

• In law, loss is a decrease in a person’s financial, physical, emotional, or legal situation
• There are two types of loss: economic and noneconomic
• In insurance, loss is the basis for claims under a policy
• Insurance companies define all losses as partial or total
• In motor vehicle accidents, there are personal injury losses and property damage losses
• It can be advised to file claims for these two types of losses separately as it takes different lengths of time for the extent of each loss type to become totally clear

What Is Loss?

In law, the term loss refers to any decrease in a person’s financial, physical, emotional, or legal situation. Sometimes, loss is divided into two types: economic and noneconomic. Economic loss is when the only thing that is lost is money. Noneconomic loss can include things like:

• Pain
• Suffering
• Inconvenience
• Injury
• Mental anguish
• Loss of life
• Injury to reputation 

Loss in Insurance

In insurance, loss is the basis of a claim for damages under a policy. It is defined as injury and/or damage that the insured individual experiences as a result of an event for which they are insured. The event has to be covered in the insurance policy for the insurer to be responsible for compensating for it. 

Insurance companies define all loss as one of two types: partial and total. Total loss means a loss in which the cost of repairing or replacing the property in question is more than its determined value.

Loss in Motor Vehicle Accidents

In a motor vehicle accident, there are two kinds of loss that can be suffered: personal injury and property damage. Personal injury includes things like:

• Cuts
• Bruises
• Broken bones
• Shock
• Death

Property damage can include any of the following: 

• Damage to one’s car
• Damage to another vehicle such as a motorcycle
• Damage to items in the vehicle at the time of the accident

You can also be compensated for past and future economic loss if you are unable to work as a result of your accident. 

It’s important to note that different insurance policies can apply to different types of losses. It can sometimes be best to handle them as separate claims. This is because the extent of your property damage may be obvious immediately, but it can take much longer for it to become clear what the extent of your personal injuries is. 

It might take months or even years for your injuries to stabilize enough for you to have a full understanding of your future medical needs, any required future domestic services, and future economic loss due to reduced earning capacity. 

It can be a good idea to hire a motor vehicle accident attorney to help you navigate the best timing for making your claims so that you can receive the best possible payout.