When you get into a car accident in Florida, you may incur various expenses, such as car repairs and medical treatment. However, you might not consider the possibility of your insurance premiums increasing after a crash. But why do insurance premiums increase after you get into a car accident in Florida?
Florida’s No-Fault Insurance System
Florida operates a “no-fault” auto insurance system. As a result, all Florida drivers must purchase at least $10,000 in personal insurance protection (PIP) coverage from their auto insurer. PIP coverage helps pay for medical expenses and provides reimbursement for lost wages resulting from injuries suffered in a car accident, regardless of who may have caused the crash. The no-fault system requires injured car accident victims to turn to their insurance first for compensation before they may file a lawsuit against an at-fault driver, with accident victims becoming eligible to sue if they suffer a “serious” injury (e.g., permanent disability, loss of bodily function, disfigurement) or their medical expenses exceed their PIP policy limit. As a result, the no-fault system allocates a portion of the losses from a car accident to each injured person’s insurance, which may increase insurance costs.
Common Reasons for Post-Accident Premium Increases
Some of the reasons why insurers may increase your premiums after a car accident in Florida include:
- At-fault determination: Insurers will almost certainly increase your auto insurance premiums after a crash in which the police, the insurance company, or a jury finds you at fault for causing the accident. When you cause a crash, you become a bigger risk for future claims for the insurance company.
- Cost of claims: An insurance company may increase your premium if you cost the insurer a significant amount of money in a claim, since the company will seek to recoup the money it has paid.
- Frequency of claims: Drivers who frequently submit auto claims may see an increase in premiums, as the insurance company may view them as a higher risk for future claims.
- Aggravating factors: Insurers may increase premiums more substantially for accidents that involve aggravating factors like distracted driving (e.g., using a cell phone), reckless driving, or DUI.
Other Factors That May Influence Rate Hikes
Auto insurance companies evaluate various other factors when determining a policyholder’s premium. These factors influence the insurance company’s assessment of the risk posed by a policyholder’s claims. Common factors considered by insurers include:
- Age: Many insurers view teen drivers as posing a high risk of accidents due to their limited driving experience and developing decision-making skills.
- Driving history: An insurer will review a driver’s record to determine if they have a history of prior accidents or traffic violations.
- Garaging location: Insurance companies also evaluate a driver’s location when assessing risk. For example, drivers living in urban areas may have a higher risk of accidents with other vehicles.
- Vehicle year/make/model: Insurers may offer lower premiums to drivers who own newer vehicles equipped with modern safety technology, which can help reduce the likelihood of an accident. Conversely, some vehicles may have a higher risk of claims, such as car models with higher rates of theft.
- Credit score: Some insurers also consider a policyholder’s credit score if an insurer considers a lower score as indicative of a greater risk for filing claims.
How Can You Mitigate Increases in Insurance Premiums?
Tips for mitigating increases in insurance premiums after a crash in Florida include:
- Consider taking a defensive driving course, as some insurers offer premium discounts for completing such courses.
- Obtain accident forgiveness coverage, which some insurers may sell for an extra premium or offer as a free benefit after several years of accident-free driving; an insurer that provides accident forgiveness coverage agrees not to increase premiums after a driver has an accident.
- Shop around for lower premiums.
Contact a Car Accident Lawyer Today
When you’ve had a car crash in Florida, contact Hutch Firm today for a free, no-obligation consultation with a motor vehicle accident attorney to learn more about your legal options and discuss what to expect as you recover from a crash.