As we usher in 2024, insurance policyholders across the nation are facing a significant uptick in insurance premiums. New data from Bankrate is showing that the national average for car insurance premiums has climbed 26% from last year, with the average rates at $2,014 in early 2023, rates have now risen to $2,543. To understand why this surge in price we have to understand how an insurance company makes its profits, as well as how these business practices affect the landscape of personal injury law.
The Anatomy of the Increase
The 26% hike in insurance rates is caused by multiple different factors. At its core, the increase in price can be attributed to rising operational costs, heightened claim frequencies, and inflation affecting every aspect of the auto repair would. This uptrend not only strains the wallets of policyholder but it also signals a deeper, more systemic issue within the insurance industry’s approach to claim management.
The Business Model of Insurance Companies
To decipher the reason for rising rates for car insurance we first must understand the fundamental business model of an insurance company. An insurance company operates on the principle of risk management, meaning you pay them your insurance premiums every year so that if you get into an accident your coverage will be able to assist you in paying for medical expenses, repairs, and damages for pain and suffering. However Insurance companies make their profits from pooling the premiums from policyholders and investing the income generated from these funds into the stock market, generating large returns for the company.
Delaying Tactics and Their Impact
During an insurance claim, the strategies employed by an insurance company are used to maximize their profitability, and these strategies often manifest as delaying tactics. By prolonging the claims process, insurers can capitalize on extended investment periods, thereby increasing their financial returns. Insurance companies encourage taking as long as possible during the claims process, the longer a claim takes to resolve for them, the greater their investment returns are. This deliberate slowdown can be devastating for claimants, who may face financial strain and emotional distress while they are waiting on an insurance companies response.
Minimization and Denial of Claims
Beyond delays, insurance companies are also known to employ tactics aimed at minimizing or outright denying valid personal injury claims. These methods range from disputing the severity of injuries to challenging the necessity of medical treatments. In doing so, insurers protect their bottom lines by reducing the amounts paid out on claims. This practice not only undermines the financial stability of claimants but it also erodes trust in the insurance process.
Navigating the Legal Landscape
For individuals who are embroiled in personal injury claims amidst rising insurance rates, the path forward involves a keen understanding of their rights and the insurance industry’s practices. It is essential to:
- Stay Informed: Knowledge of insurance law and policy terms can empower claimants to seek legal assistance and to challenge unfair practices.
- Seek Expertise: Enlisting the help of an experienced personal injury lawyer can level the playing field, ensuring that a claimants’ rights are vigorously defended, and that the insurance company pays out their fair share for the claim.
- Document Everything: Comprehensive documentation of injuries, treatments, and interactions with insurance companies can help strengthen a claimant’s position with an insurance company.
The 26% rise in insurance rates in 2024 serves as a stark reminder of the challenges that you face when filing a personal injury claim. As insurance companies employ tactics to delay, minimize, and deny claims, it is imperative for claimants to arm themselves with knowledge and expert support. If you have been injured in an accident it is vital to your personal injury claim that you hire the best car accident lawyers in Utah. Here at LifeLaw Personal Injury our team of car accident lawyers will make sure that you understand the legal landscape and fight for your rights against an insurance company to ensure that you get the compensation that you deserve. If you or someone you know has been injured, be sure to contact LifeLaw Personal Injury today for a free consultation 801-206-4002.