Injury lawsuits are the most costly results of an auto accident, which means that a surplus in injury lawsuits equals a surplus in auto insurance premiums. Why is this? When the insurance company is shoveling out a lot of money to pay for these damages, there are less funds to go around, so everyone with that insurance company suffers. When injury lawsuits rise, this reflects the increasing dangerousness of the road, which indicates a greater risk for all of the drivers in a designated area. Although there may not be a clear reason why these lawsuits are increasing, the fact that they are increasing tells the insurance company that there is general negligence on the road that increases the likelihood of any driver getting into an accident.
Injury lawsuits not only reflect the road conditions and risk of drivers, but they also drive up a hefty bill for even the most financially stable insurance companies. On top of high medical bills, your insurance coverage will even have to cover the bill for the legal process of the injury lawsuit, including court fees and lawyer fees. For especially serious injuries, your insurance policy may even have to foot the bill for wages lost during the injured period. It's easy for anyone to see how quickly these figures can add up and how much of a strain they can put on the insurance company.
When the funds from the insurance company have been strained, the only way to replenish them is to charge higher premiums from the policy holders. This is not only to financially stabilize the company, but also to prepare for additional injury lawsuits to surface, since the increase indicates a strong likelihood of this outcome. Although these statistics may rise on a nation-wide scale, the injury lawsuit and auto accident statistics of the states also play a role in calculating the final premium. If moving is an option for you, it might be best to choose an area with low statistics in both of these categories to help reduce your high premium.
Can I Keep the Auto Insurance Claim Money and Repair the Damage Myself?
When you make a claim on your auto insurance after an accident or an incident that caused damage, you will receive funds to make repairs after an estimate is obtained for the cost. If you do not ha...
Read More →
Do I need to Personal Injury Protection (PIP) Coverage on my Auto Insurance Policy?
Not everyone must buy personal injury protection, but it's certainly a beneficial addition to your auto insurance policy, should the coverage be provided in your area. Personal injury protection, o...
Read More →
How do you Know when it is Necessary to Call the Police when Involved in a Car Accident?
When you are in a major auto accident, you already know that it is important to call the police and an ambulance. If you do not contact the authorities personally, then it is likely that passersby ...
Read More →