Many people believe that after they are involved in a car accident, their insurance rates will automatically skyrocket. However, that really depends upon a variety of factors, including a person’s insurance company, policy, and rates. Since insurance companies do not offer everyone the same rate, it may be a good idea to do research and look for a good deal on insurance if you are involved in an accident.
In addition, you should consider a variety of factors if you are in the market for a new car insurance company. Depending upon your circumstances, the least expensive insurance at the outset may not be the least expensive in the long run.
If you are involved in a motor vehicle collision with another vehicle, one of the first steps you will likely need to take is to contact your insurance company. In some states (such as no-fault states), if you are involved in a motor vehicle accident, your own insurance company will take care of your medical bills, lost wages, and other out-of-pocket costs. In these states, the at-fault party’s insurance company only comes into play if you suffered a permanent injury in your accident—or if your own insurance is insufficient to cover your resultant medical bills and other expenses.
In other jurisdictions (such as fault-based jurisdictions), the insurance company for the at-fault motor vehicle operator will be responsible for your damages, although you may have personal injury protection under your own insurance policy which can help pay for your medical bills and lost wages. In these jurisdictions, if the at-fault driver did not have motor vehicle insurance—or if the insurance was insufficient to cover your damages—then you may file an uninsured or underinsured motorist claim with your own insurance company.
Regardless of the jurisdiction where your car accident occurred, it can be difficult to understand how motor vehicle insurance works and when various types of insurance coverage may come into play. It is also important to take steps to try and minimize out-of-pocket costs related to insurance. An experienced car accident lawyer in your jurisdiction will answer all of your insurance questions and can assist you in taking steps to minimize your out-of-pocket costs and increase the amount of your damages.
Finding a Less Expensive Auto Insurance Rate
Finding good auto insurance can be tricky. Even though a particular car insurance carrier may offer affordable auto insurance rates before an accident, the affordability of those same rates may drastically change if you are involved in an accident and actually have to use the insurance. These drivers often have to switch auto insurance carriers afterward, if this takes place.
It is always important to do your research, compare quotes, and shop around for good auto insurance rates. In some instances, smaller carriers are more likely to offer you better rates than the big-name auto insurance carriers.
Claiming that the Car Accident Was Someone Else’s Fault
Many car insurance customers are very surprised when they learn that their car insurance rates go up after they are involved in a collision—even if they are not the at-fault driver in the accident. Many car insurance companies will raise a customer’s insurance rates simply for making an auto insurance claim. According to the Consumer Federation of America, some insurance companies may raise their insurance rates by more than ten percent following an auto accident. This is true even when the individual who is making the claim did not cause the accident.
In some jurisdictions, however, these types of post-accident rate increases are not allowed. Some insurance companies, like USAA, routinely state in their advertisements that they will not increase your insurance rates if you are involved in a motor vehicle accident that you did not cause.
In states that utilize a no-fault system (wherein an accident victim must file a claim with his or her own insurance company, regardless of who caused the accident), you have a stronger chance of seeing increased post-accident insurance rates.
When shopping for insurance coverage after being involved in a motor vehicle collision, it is important to get quotes from multiple insurance companies, to get the best deals and find the most affordable insurance rates.
How Long Post-Accident Insurance Rate Increases Tend to Last
One of the biggest concerns among individuals who were in a car accident is the length of time that a post-accident insurance rate increase will last. Depending upon the insurance company, a post-accident rate increase may last for as long as three years after the date of the accident.
Post-accident insurance rate increases can last for longer than three years under certain serious circumstances. For example, if you were recklessly driving your vehicle at the time of the accident, if your negligence resulted in another driver’s serious injury or death, or if you were under the influence of drugs or alcohol at the time of the accident, your insurance rate increase may last for significantly longer than three years.
Moreover, if you have accumulated numerous moving violations within a specific time period (as determined by the jurisdiction where you reside), your insurance rate increase may last for a significant time. If you have a large number of moving violations or prior accidents on your driving record, insurance companies will likely consider you a high risk, and it may be difficult for you to find good car insurance coverage at a reasonable rate. In those instances, you may need to obtain high-risk insurance coverage.
The Largest Spikes in Car Insurance Rates
The largest spikes in auto insurance rates typically occur after a person files an accident claim involving a bodily injury. It is no surprise that insurance rates often increase significantly following bodily injury claims, since these claims can often be expensive for insurance companies. Consequently, every jurisdiction in the United States, except for New Hampshire, requires drivers to carry a minimum amount of insurance coverage for bodily injury on their auto policies.
How Can Insurance Companies Legally Raise Their Insurance Rates?
Post-accident rate increases by insurance companies have often been the subject of debate. After all, people purchase car insurance policies so that they will be covered if something bad happens. However, many car insurance companies claim that statistically, if you file an accident claim once, there is a strong possibility that you will file more claims in the future. This can pose a risk to customers, which in turn translates into higher car insurance premiums.
Steps that You Can Take to Avoid Huge Car Insurance Rate Increases
There are several actions that many drivers can take to lessen the likelihood of a significant rate increase. Some of those actions include the following:
Take Advantage of First-Accident Forgiveness
Many insurance companies will offer customers discounts if they do not have any accidents within a certain period of time (these are sometimes referred to as safe driving discounts). Insurance companies may also offer first-accident forgiveness and will not hike your insurance rates after a first accident. The insurance company may even give you a rate cut if you do not have any accidents or incur any moving violations within a certain number of years. However, you sometimes need to be careful with insurance companies who offer these types of rates or incentives, as there may be higher initial rates if you decide to add one or more of these clauses into your auto insurance policy.
Only Use Your Auto Insurance When You Absolutely Need It
The main purpose of auto insurance is to keep you safe from financial ruin in the event you are involved in a motor vehicle collision—especially if another person sustains injuries. While it is important to use your auto insurance coverage when you need it, you should not use your coverage if you can afford to pay any damage out-of-pocket. This will avoid the need for filing a claim in the first place—and a subsequent rate increase. For example, if you are involved in a minor fender-bender accident, and you can pay for the damages out-of-pocket, you may be better off doing that than filing a claim with your insurance company.
Drive Safely and Defensively at All Times
One of the best ways to avoid an auto insurance rate hike is by simply operating your vehicle in a safe and responsible manner at all times. It is also a good idea to check with your insurance agent and find out if you may qualify for a safe driver discount on your current insurance rate.
Filing a Claim
Motor vehicle accidents cannot only result in serious property damages. Physical injuries can occur as well, ranging from relatively minor soft tissue injuries to far more serious spinal cord injuries, bone fractures, and traumatic brain injuries. In accident cases like these, you are more likely to file an insurance claim.
The jurisdiction where your accident occurs essentially determines which insurance company will cover the bulk of your damages. For example, if your accident took place in a no-fault jurisdiction, you will typically file the insurance claim with your own insurance company, even if someone else caused your accident. You will only turn to the at-fault driver’s insurance company if you suffered a permanent injury or if your own insurance coverage was insufficient to cover your damages.
If your accident occurred in a fault-based jurisdiction and due to someone else’s negligence, you will typically turn to the at-fault driver’s insurance company to file a claim for damages (unless that driver was totally uninsured).
Especially when you are dealing with an at-fault driver’s insurance company, you should always keep in mind that the insurance company is never truly on your side. Instead, the insurance company has its own financial interests to protect, and it will protect those interests first and foremost. At the end of the day, insurance companies are businesses and will do whatever they can to limit your compensation following a motor vehicle accident.
An experienced car accident attorney can answer all of your legal questions about filing a post-accident motor vehicle insurance claim—and with whom it should be filed. Your lawyer can also negotiate a settlement of your claim. Should you decide not to settle, your lawyer will litigate your case in the state court system. The litigation process typically begins by filing a lawsuit against the motor vehicle driver who was at-fault for your accident. After completing discovery (including answering written interrogatories and attending an oral deposition), there may be additional settlement negotiations. If the case still does not settle by that point, you have the option of taking your car accident case to trial, or pursuing arbitration or mediation (also known as “alternative dispute resolution”).
Talk to an Experienced Car Accident Lawyer About Your Insurance Options and Concerns Today
Options regarding car insurance coverage are plentiful, but you want to make sure that you are receiving a good rate before committing. Although many insurance companies talk a good game, you want to make sure that you shop around for rates, so that you are less likely to incur a rate hike after being involved in a car accident.
An experienced car accident attorney in your jurisdiction can assist you by answering all of your legal questions regarding insurance coverage. If you are involved in an accident where you suffered an injury, your lawyer can assist you with filing a claim with your own insurance company or with the at-fault party’s insurance company for damages.
If you can’t settle your car accident case favorably, contact a lawyer who can assist you with filing a lawsuit against the at-fault individual (if your accident occurred in a fault-based jurisdiction), and work to maximize the monetary compensation you ultimately recover in your car accident case, via a settlement or trial.
