Increased Premium Rates and Other Losses Often Ignored by Car Accident Victims
Unseen Financial Consequences of Car Accidents
After a car crash, one naturally worries about the immediate auto repairs, medical expenses, and insurance claims. However, the expense doesn’t end with these upfront costs. An accident can increase insurance premiums, affecting your budget for many years after the accident. The average national spending on auto insurance rose by 6.1% to $1,127 in 2022, with higher spending in states like Florida ($1,625) and Louisiana ($1,558), as the Insurance Information Institute reported. Auto insurance premiums continue to climb nationwide as repair costs increase and vehicles on the road become more expensive.
How Insurance Premiums Surge After an Accident
How much your insurance rates will increase after a collision depends on several factors. The most significant premium hikes are associated with at-fault accidents, which indicate to insurers that you’re a high risk. The other factor that helps in determining claim amounts is the severity of the accident itself, with accidents with bodily injuries tending to result in steeper increases than accidents with only property damage. If you are not sure what to do after an accident, consult a car accident lawyer from William Mattar.
Hidden Expenses Victims Often Overlook
Accident victims often underestimate other long-term financial consequences beyond the increase in premium costs. These expenses can accumulate over years or months if there is continuous damage in the event of injuries. Lost days from work further equate to lost wages, which affects future opportunities for career advancement. NAIC statistics show that the average loss incurred per collision claim increased 18.6% from 2020 to 2021, increasing to over $6,150 per claim. Furthermore, most individuals suffer reduced value of vehicles after repairs, which equates to lower profitability from future sales or trade-ins. While real physical damage will accumulate when uninsured, the cost burden of the psychological aftermath, from driving anxieties to multiple therapy visits, can increase since they’re not always insured.
Minimizing Financial Losses After a Collision
While some financial impacts can’t be avoided, there are some ways to mitigate this loss. Most insurance companies offer accident forgiveness coverage, which keeps your rate from increasing after your first collision. Fulfilling defensive driving schools can be eligible for discounts to offset rate hikes. Some drivers may also shop around for new policies because insurance carriers use varying means of rating accident drivers. It is also usually financially advisable to bundle more than one insurance policy, which generally has discounts that can offset premium hikes. The insurer often reduces monthly premiums by increasing deductibles, but these choices must be weighed against what the individual can afford out of their pockets.
Taking Charge of Your Financial Recovery
Understanding your financial situation after an accident gives you the facts needed to make informed choices. In 2022, the national combined average premium per vehicle issued was $1,258, an increase of 5.75%, or $69, from 2021, according to the Insurance Information Institute. The cost of a collision can be high. Still, by acting early to address both the short-term and long-term financial impact of a crash, victims of an accident can sharply reduce the overall cost. Keeping your driving record clean is key, as most insurers lower premium increases gradually after three to five years without violations or accidents.
Visit the rest of the site for more interesting and useful articles.
