Car accidents are stressful enough. Dealing with the nitty gritty of self-care, lost income and vehicle maintenance can be a weight that you have to carry around for some time. And to make the process more stressful, you often have to go through the rigmarole of filing a claim with your insurance company, hoping to receive adequate compensation. And insurance companies are often looking to reduce the value of your claim to increase profit margins. To that end, it is ideal to retain a skilled attorney who understands the intricacies of insurance claims in your area. Your attorney will be able to lobby for your interests, while adeptly avoiding traps laid by the adjuster. There are a number of external factors that might affect the cost of car insurance and the amount awarded in car accident settlements.
Cost of Insurance
In 2015, there were nearly 263 million registered vehicles on the road in the US and over 32,000 car crash fatalities. The number of fatalities has only gone up and so have the insurance rates. The numbers in Canada are equally appalling. The cost of insurance can go up for any number of reasons, as explained by the Insurance Information Institute. Some of them are within your control. For instance, if you put another vehicle on your policy – perhaps for your teenage kid – this could affect your insurance payments. But other factors, outside of your control, may also cause premiums to increase. As the number of crashes, injuries and fatalities increase, so too will the cost of your insurance. If you live in a congested city, you’re likely to pay more for insurance than, say, in the rural Midwest, where there are likely fewer accidents.
The Effect of Unemployment
Thus, overall trends in traffic safety can negatively impact your wallet. Traffic safety is subject to its own set of influences. For example, unemployment appears to have a direct effect on the number of car accidents and fatalities in a given year. As unemployment decreases, more people drive to work and more drivers have disposable income, leading to more leisure driving. With more drivers on the road more of the time, the likelihood of car accidents increases. What’s more, people are more likely to purchase fancier, more expensive vehicles. These automobiles are often outfitted with hi-tech components, making them far more expensive to fix. The increased cost of maintenance can have a damaging effect on overall insurance costs.
Statutory Burden
You might also find yourself limited by the laws in your region. Residents of Ontario may be familiar with the unsettling statute requiring claimants to forfeit a large portion of their auto insurance settlement to the insurance company. This is referred to as a statutory deductible and it essentially means that the amount awarded to you can decrease significantly if your settlement is lower than a certain amount.
If, for instance, you, the driver, are awarded pain and suffering damages – or compensation for intangible effects such as emotional turmoil – and the award is lower than $124,616.21, the insurance company is entitled to keep $37,385.17 as a deductible. Similarly, if a family member receives less than $62,307.59, they must give up $18,692.59.
This means that if you are awarded less than $37,385.17, you would actually owe the insurance company money. These numbers are subject to change depending on yearly fluctuations in inflation.
Maximizing Your Award
The law in Ontario may not be universal, but it illustrates something important: local statutes and other externalities can dramatically affect the outcome of your claim. For this reason, it’s important to abide by a few basic principles when seeking compensation. For one, it’s imperative not to accept a low settlement amount. Insurance companies will do everything they can to get you to accept a low offer. To that end, it’s important to remember all the various costs associated with your accident. These could include: medical costs (present and future), lost income, and pain and suffering damages, to name a few. These add up very quickly, so it’s a good idea to pursue a higher amount than the insurance company wants to give you.
Ultimately, it’s advisable to have an attorney by your side with experience in insurance claims. That way, you can defer to them when the insurance adjusters ask you questions. This will help you receive the maximum compensation for your injuries.
