alt Hacker News>John Smith hits you -> you seek relief from John's insurance company. John's insurance premium goes up. He can't afford that. Thus, effective financial feedback loop. Real skin in the game.
Ah great, so there's a lower chance of that specific John Smith hitting me again in the future!
Yes, that is the specific deterrence effect.
The general deterrence effect we observe in society is that punishment of one person has an effect on others who observe it, making them more cautious and less likely to offend.