After a car accident most drivers are concerned their auto insurance premiums will increase. This can be particularly concerning when a driver that did not cause the accident ends up paying more for insurance. There are a few things not at-fault drivers involved in an accident should understand. Many factors influence an insurance company’s decision to increase a driver’s premium, regardless of fault. Such factors include how the claim is filed, where the claim is filed, and the insurance company the claim is filed with.
The factual circumstances of the accident will likely affect how the claim will be filed. For instance, if you hit a deer or unexpected flying debris strikes your car, damage will likely be covered by comprehensive coverage and will not result in an increase in insurance rates. Depending on what is covered under your comprehensive coverage, damage caused by running over items and alike will be filed under collision coverage and may result in higher payments.
Another, more worrisome situation driver’s face are accidents caused by drivers with no insurance, little insurance, or expired insurance. These types of claims are typically filed or fall in part on the uninsured or underinsured motorist coverage of the person making the claim since the person at fault didn’t have insurance at all or didn’t have enough insurance to fully compensate the injured driver. Since the not at-fault driver’s insurance company is forced to pick up the bill, this driver may see increased rates even though they pay a separate premium for the coverage that will provide said compensation.
Research suggests that although a driver is deemed “not at-fault”, insurance companies believe an increased premiums is appropriate due to the likelihood of future accidents. Another theory suggests it is unlikely that one driver is 100% at-fault and the other is 0% at-fault, though to most people this seems untrue.
State laws where the claim is filed may limit or prohibit insurance companies from increasing premiums for not at-fault drivers. A report from Consumer Federation of America shows that only two states – California and Oklahoma – completely bar insurance companies for penalizing innocent drivers. On the other hand, individuals in cities like New York City and Baltimore see the highest charges for accidents they weren’t at fault for.
The CFA study shows that the five leading auto insurance companies handle innocent drivers very differently. When it was not violation of state law to do so, Progressive charged their not at-fault drivers almost 17% more in every case. According to the study, “sometimes” Geico and Farmers raised rates by 14% and 11% respectively, while Allstate “occasionally” charged innocent drivers more by 5%. State Farm was the only company that never raised rates for their drivers deemed not at-fault.
As you shop for auto insurance, it is important to research what is covered under your policy and when your insurance company can increase your rates. If you see additional charges from an accident that was not your fault, be sure to question your insurance company.