Accidents are expensive, and whether you are in an accident or not, insurance companies raise premiums to cover the costs of accidents. The insurance company might raise everyone’s premiums by a few dollars if one of their customers gets into an accident. If you get into an accident, you could see a significant increase in your premiums. Vehicle insurance covers compensatory damages and punitive damages. After an accident, the defendant pays these damages to the plaintiff. If the insurance company has to make a significant payout—in the millions—the at-fault driver will see a substantial increase in their premiums. In most cases, the amount of premiums a person pays is much less than what an insurance company pays out after an accident. For example, the defendant’s insurance premiums are $1,000 per year. The defendant wrecks and totals your vehicle and his vehicle, and you suffered catastrophic injuries that caused permanent disabilities. Your award, whether via settlement or a jury trial, could be in the millions. To make an apt comparison, the defendant is 45 and has been with the same insurance company for 28 years. His premiums are $1,000 per year. That is just $28,000 the insurance company collected on behalf of the defendant. However, the insurance company agreed to pay you $5 million because you will never recover from a traumatic brain injury you sustained in the accident. That is quite a difference, and the insurance company wants to make it up somewhere. Compensatory damages include economic and non-economic damages, including: Medical expenses. Therapy expenses, including physical, cognitive, occupational, and psychological therapies. Lost wages. Loss of future earning capacity. Replacement or repair of destroyed or damaged personal property, including your vehicle and items of value inside the vehicle. Death-related expenses if you lost a loved one in a car accident. Pain and suffering, including emotional distress. Loss of quality of life if you have to make life changes, such as taking prescriptions or using ambulatory aids for the rest of your life. Loss of consortium or companionship. Inconvenience if you have to hire someone to do your normal chores, including lawn maintenance, home maintenance, grocery shopping, and house cleaning. Amputation of a limb or digit. Excessive scarring or disfigurement. Adding punitive damages, which the court only orders if the defendant’s behavior was grossly negligent or intentional, could add hundreds of thousands to your claim. Even if the defendant is 100 percent at fault for the accident, you could see increased rates because the insurance company raises rates across the board and figures that you are more of a risk to it. If you suffered injuries or lost a loved one in an accident, contact a car accident lawyer as soon as possible for a free case evaluation.