How Much Do Car Insurance Premiums Increase After an Accident?
If you are one of the people injured in one of the more than 12,000 auto accidents that occurred on Texas roadways during one recent year, you might have had a very unwelcome surprise when you received your auto insurance bill for the new year. Shockingly enough, even when a car accident is not your fault, you may face a car insurance premium increase following an accident. Contact an experienced San Antonio car accident lawyer today to get your legal questions answered.
Texas Auto Insurance Requirements
According to the Texas Department of Insurance (TDI), if you are a licensed driver in Texas, then you must maintain a minimum amount of liability coverage. This coverage includes:
- Per person liability coverage – You are required to maintain at least $30,000 in liability coverage in the event you cause an accident that results in bodily injury.
- Per accident liability coverage – Texas law requires coverage for up to $60,000 in liability for each accident.
- Property damage coverage – If you cause an accident resulting in damage to property only, including another car, fence, etc., your coverage may be less than $25,000.
Texas drivers are also encouraged to carry other insurance coverage, including personal injury protection (PIP), uninsured motorist bodily injury, and uninsured motorist property damage policies. However, drivers may reject this additional coverage if they so wish.
Keep in mind, if your car is a newer model that you financed, your lender may have a higher requirement for liability and will also require you to carry comprehensive coverage that includes fire, theft, and collision.
Typical Texas Insurance Costs
On average, a driver over the age of 18 who carries the minimum required coverage in Texas will pay a monthly premium of around $63, or about $750 per year. This does not include any “add on” coverage, nor does it take into consideration any penalty that you may face because you are under 24, have a spotty driving record, or have poor credit. These factors may actually double the amount of your premium.
Unfortunately, what many people do not realize is that even when an accident is not your fault, you may still face an increase in your premium of up to 40 percent.
Why Penalize Drivers Who Did Not Cause Their Accidents?
It may seem counterintuitive to penalize a driver who is not at fault for an accident by increasing their insurance premiums. While Texas does have a Consumer’s Bill of Rights for insurance, it does not discuss premium increases following an accident. So, why does the law allow insurers to penalize faultless drivers who have been involved in accidents? It may surprise you to learn that Texas ranks 16th in the United States for uninsured drivers. This means the possibility of being injured by a driver who lacks coverage is high.
There is another problem as well. Even when a driver has purchased the proper coverage, if your injuries exceed that minimum coverage, your insurance company may have to pay the remainder of your claim. While this may seem unfair, the insurance company is attempting to make money. Like any other business with a similar model, these companies make money by collecting fees, in this case, premiums. Their incomes decrease when they have to pay out claims; therefore, these companies recover some of those costs by passing on the cost to you, their customer, in the form of higher premiums.
Why Is the Other Driver’s Coverage Insufficient?
You may think that $30,000 in liability coverage is sufficient to cover your injuries, but stop and consider the high cost of medical bills, the damage to your car, and the costs associated with your lack of employment. An insurance company may have to cover these damages if it has to pay a valid claim filed by a car accident victim.
Some of the potential damages include the following:
- Medical expenses – These expenses include, but are not necessarily limited to, the cost of your initial treatment following an accident, follow-up care, and rehabilitation costs. In addition, these expenses cover tests, X-rays, prescription medications, and visits to specialists, and they may also include the costs associated with transportation to and from your appointments.
- Lost wage recovery – In addition to compensating you for time lost from work, in some cases, car accident victims should seek additional compensation when filing their personal injury claims. For example, if you lose money that otherwise would have been put into an individual or company-sponsored retirement account, lose money on a bonus that you could have earned if you could work, or have to work in a different capacity resulting in a pay cut, these losses may all be claimed as lost wages.
- Property damage – If you have a newer model vehicle that suffers damages in a car accident that was not your fault, the cost of your property damage may easily exceed the liability coverage carried by the at-fault driver. Since many new cars cost more than $25,000—and even windshields and bumpers are now filled with delicate sensors and expensive to repair—this should not really come as a big surprise.
As you can see, regardless of who is at fault in a car accident, the potential for exceeding the limits of the minimum required insurance in Texas is high.
Contact a Skilled Car Accident Attorney
For those who suffer an injury in a car accident, the potential to face increased insurance premiums that may last three to five years is another good reason why injured individuals should consult an attorney to review their auto accident cases. When someone else is at fault for an accident, you should not have to deal with the financial fall-out associated with the accident, including increased insurance premiums. As part of a settlement, your attorney may ask to penalize the at-fault driver for the added costs of your insurance.
Anyone who has suffered an injury in a car accident should consider contacting an attorney for advice before speaking with an insurance adjuster. This is important because having someone explain your rights following an accident will help you make sure that you are not taken advantage of as you recover from your injuries. You should schedule a free consultation with a car accident attorney. Remember, this step does not obligate you to hire an attorney, but you can gain some insight into what options are available to you, and then decide your best option to move forward.