system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:How does insurance assign value to the body part of a musician?
gpt
Insurance is always, ultimately, based on the value of what will be lost.  In the case of a musician, what's lost is the revenue generated from sales of their albums or music, or wages from playing gigs.  This is actually pretty similar to how insurance handles a totaled car - a used car doesn't have a specific, set value, it depends on the exact condition of the car, the mileage, the make, model, and year, the area you're in...a thousand factors.  But they can *estimate* the value based on how much similar cars have sold for.

Likewise, insurance companies can look at the past sales (or wages) of that musician and compare it to similar musicians and estimate how much the insured musician *should* make during the course of their career.  That's how much they pay out in the event of an injury.  Really, when you hear that a musician's arm or throat, they're insuring their *career* which is dependent on that body part.

Based on the projected payout and the likelihood of having to pay out, and based on the income from other people paying into insurance plans, the company has a baseline price to use for negotiation.