After an accident, many of my clients and prospective clients are worried about their insurance rates going up. That is a natural and common concern. Here is the short answer: I don't know!
Insurance companies use all kinds of data to rate you as a driver. Clients are often surprised to learn that every insurance company comes up with its own rating system. Some use driving records, your experience as a driver, your credit score, where you live, the length of your commute, your driving history, the number of accidents you've had, the number of claims you've made, and the list goes on. I generally tell my clients that if the accident was NOT their fault, their insurance rates would probably not go up, but of course, I also told them that I couldn't guarantee such an outcome because I don't make those decisions. Insurance company underwriters make those decisions.
However, there is now an emerging trend, as reported by the Consumer Federation of America, that major insurance companies are now raising insurance rates even if you were NOT at fault. This is a major shift and even more reason why you might want to shop around for a new insurance company. So even if you are not at fault, some companies are inclined to raise your rates anyway. Perhaps they consider you a larger risk. I can't tell you why, but it seems more an more insurance companies are implementing this approach.
Certain insurance companies were singled out in the report. For example, Progressive Insurance, Farmers, and Geico were among the most aggressive in raising rates against their insured clients, even if they weren't at fault. State Farm, on the other hand, never raised rates on their clients in such cases. The study also found that lower income drivers were incurring higher rate increases than higher income drivers. On average, it seems rates went up about 10%. The report also notes that 18 million Americans live in areas of the country where auto insurance is basically deemed affordable by the United States Treasury Department’s Federal Insurance Office.
Certain states like Oklahoma and California don't allow such rate hikes (let's hope it stays that way). The study suggests people should complain to their insurance companies and should inquire if they raise rates even if you're not at fault. I tell my clients if they are not happy, they can take their business elsewhere. There is no shortage of auto insurance companies out there willing to insure you. It takes some time and effort, but using a good insurance broker who is knowledgeable about insurance can be very helpful. Also, a good insurance professional can better advise you about buying the right kind of coverage. Having insurance is great, but having the right insurance coverage is better.
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