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The Impact of Personal Injury Cases on an Individual’s Insurance Premiums and Credit Rating

Most people don’t think about the effects of an accident caused by someone else on their credit score and insurance premiums. Typically, accident victims focus more on getting the treatment they need to recover.

However, considering the potential consequences of a personal injury case on credit and insurance is crucial. Although there isn’t a direct impact, an accident can cause financial issues leading to debt.

Here you will find helpful information about the impact of personal injury cases on insurance premiums and credit ratings and how to avoid negative consequences. 

How a Personal Injury Case Effects Insurance

If you get hurt in an accident and file a claim with someone else’s insurance because they were at fault for your injury, it should not affect your insurance coverage. The at-fault party’s insurance company processes the claim and determines whether to offer a settlement.

Specific situations like minor fender benders might not raise your rates, especially if you’re considered a safe driver without previous accidents on your driving record. However, if you are at fault for an accident, the injured party can file a claim with your liability insurer. That might affect your standing with the insurer and cause them to increase your monthly premium payments. 

How a Personal Injury Case Affects Credit

A personal injury case doesn’t directly impact your credit score. The credit bureaus don’t receive reports of accidents. Credit scores only reflect a person’s debt-to-credit ratio. Although the accident won’t reduce your credit score, factors related to your case can.

Medical bills and other expenses can cause financial strain. If you can’t afford to pay your bills, you incur debt. Medical facilities and providers might report your overdue accounts to the credit bureaus. Over time, your bills can go to collections, causing your credit score to drop. 

Strategies for Minimizing the Negative Consequences of a Personal Injury Case

You might be able to avoid insurance and credit issues after an accident by addressing them before they become problems.

Your personal injury lawyer can talk to your doctors about your pending case. They might be able to convince your medical providers to place a hold on your account. That means they won’t expect you to pay your bills while treating your injury. They also won’t report your overdue bills to the credit bureaus. Instead, they will take a portion of your settlement or jury verdict to satisfy your debt.

Although there isn’t much you can do about an accident affecting your current insurance rates if you are at fault, purchasing a different policy or additional coverage might help. For example, some auto insurance carriers offer accident forgiveness. That protects your driving record from the negative effects of an accident in which you were at fault.

You must also consider surcharges while shopping for insurance. A surcharge is a fee the insurer adds to your premium after an event, such as a ticket or at-fault collision. If you’re unaware of those extra costs, it can impact your finances after a crash and affect your credit score if you can’t afford your bills. 

Contact Us

At The Johnson Injury Firm, your recovery is our priority. We can help you pursue the compensation necessary to cover your losses while helping you avoid the damaging effects of an accident on your financial standing. You don’t have to worry about talking to the insurance company or your doctor’s accounts receivable department while treating your injury. We will handle everything for you.

If you were injured in an accident due to someone else’s negligence, call us at (804) 262-9000 for a free consultation with an experienced car accident lawyer in Richmond, VA. We have over 125 years of collective legal experience we’ll rely on to provide effective representation and hold the at-fault party liable for your injuries and losses.

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