Definition - What does Victim Compensation mean?
Victim compensation is a government initiative that makes reparations or payments to victims of violent crimes, such as rape, assault, and homicide, to help compensate them for out-of-pocket expenses. This also includes reimbursing their families. Each state has its own program and specific coverage and eligibility requirements. In terms of insurance, victim compensation will not pay for any expenses that policies like workers' compensation may already cover.
Insuranceopedia explains Victim Compensation
Victims of violent crimes are likely to suffer some form of financial and emotional stress due to court appearances, legal fees, physical injuries, emotional trauma, and more. Victim compensation exists to help relieve some of that financial burden. It usually pays for medical expenses, counseling, funeral expenses, and lost wages. However, each type of expense has a limit, and each claim overall has a limit that may range from $10,000 to $100,000. Because the processing may take weeks or months, some states put into place emergency award programs that provide victims with sums of $500 to $1,000 to pay for emergency expenses, such as food, shelter, and medical treatment.
CLUE Yourself In: How Your Claims History Informs Your Insurance Future