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Post-accident insurance premium increases

On Behalf of | Apr 26, 2023 | Blog, Personal Injury

When a driver’s negligence causes an accident on a New Jersey road, the driver can rely on their auto insurance policy’s liability coverage. When the insurance company assumes the risks of covering the driver’s potential negligence, the company becomes responsible for paying a valid claim up to the policy limits. When the driver’s risk level increases, premiums can go up. So, those involved in an accident and relying on their auto insurance to pay for losses can expect their premiums to increase.

Factors that can increase auto liability premiums

Drivers may wonder how much their insurance premiums will increase after they become involved in a crash. The amount will vary based on several factors, including the type of accident and how much the auto insurance company pays. If someone hits another vehicle and causes $800 in damage to the car, the increase will be far less than a driver who hits a pedestrian and causes a catastrophic injury.

Not every insurance company has the same rules in place regarding increases. A particular company can offer a forgiveness perk for small or first-time minor accidents. The company might not increase rates when the claim is under a specific dollar threshold.

Severe negligence claims

Drivers may wish to look at their policy limits and determine if they are sufficiently insured. Increased insurance premiums may be the least of someone’s worries when facing a substantial personal injury lawsuit. Again, a policy only covers the driver up to their limits. So, purchasing the highest possible limit and additional umbrella excess coverage can be in some drivers’ best interests.

Sometimes, a victim may seek punitive damages to punish a defendant. The punitive awards can be substantial in cases where the defendants acted incredibly negligent. Auto insurance policies may not cover punitive awards, so victims must file a civil suit.

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