Most people are aware their auto insurance rate will increase after an accident in which they are at fault. However, there is also the potential for auto insurance to increase after any type of accident, regardless of whether the insured driver is not at-fault or completely blameless. Though it is not a certainty the driver’s auto insurance will spike after being victimized in a car accident, there are some situations in which monthly premiums will increase following a claim.
Why is It Possible for Auto Insurance to Increase Without Committing any Wrongdoing?
Your auto insurance premium has the potential to increase after an accident in which you are not at fault. The at-fault driver’s auto insurance should kick in to cover the related expenses. If this is the scenario you find yourself in, your auto insurance rates might stay the same as the costs stemming from the accident are offset by the at-fault driver’s auto insurance coverage. However, there is still the chance that your auto insurer will hike your monthly rate simply because you are viewed as that much more of a risk.
Auto Insurance After Collisions With Uninsured or Underinsured Drivers
There is also the potential for the at-fault driver to be underinsured or completely uninsured. If this is the case, your auto insurance monthly premium will likely spike as it will have to cover all or some of the costs resulting from the accident through uninsured motorist coverage. This form of auto insurance coverage is meant to provide relief if the at-fault driver lacks adequate coverage to pay for all of the related losses.
Though necessary, uninsured motorist coverage has the potential to backfire as tapping into it deems you that much more of a risk on-the-road. Simply filing a claim after being victimized by an underinsured driver has the potential to spike your auto insurance rate. The insurer’s added costs will inevitably be passed onto customers in the form of monthly premium hikes to maintain profitability.
Should You File a Claim After an Accident?
In most cases, it makes sense to file a claim with your auto insurer after an accident. This way, if the driver who erred on-the-road lacks insurance or is underinsured, you will have some sort of financial relief through your own auto insurance policy. If you file a claim, you might find your monthly premium stays the same. After all, you did nothing wrong so it makes sense that your rate remains the same after this unfortunate incident. Just keep in mind that your insurer might end up tacking a surcharge onto your policy if you file several claims within a period of two to three years.
Why Auto Insurers are Allowed to Hike Rates After Not-at-fault Accidents
Auto insurance companies are legally permitted to increase clients’ rates after not-at-fault accidents as their business is centered on risk. Risky clients should have to pay more for auto insurance as they are that much more likely to be involved in an auto accident. The unfortunate truth is those who are in the wrong place at the wrong time often end up being penalized following an auto accident claim. The same is true for those who drive at a high frequency.
The moral of this story is every driver on the road is at the mercy of others. If other drivers collide with your vehicle, you might end up paying significantly more for auto insurance across posterity unless you take the initiative to shop around. Take defensive driving courses, drive safely, prove that you are not a high-risk liability and your insurance rate will gradually return to its original level in due time.
How to Proceed if Your Insurer Raises Your Rate
If your auto insurance company hikes your monthly premium after filing a claim for an accident you did not cause, you should know you are not completely powerless. Look up the contact information for other auto insurance carriers to obtain a quote. You have between now and the time of your auto insurance renewal date before the new monthly premium is applied.
When shopping for new auto insurance, ask insurance providers if there is a surcharge for filing claims for accidents that are not your fault. Though you might end up paying a bit more each month for a policy that does not tack on a surcharge for such accidents, it is well worth it, especially if your vehicle is hit by one or several other drivers in the months and years to come. For most people, it is better to pay slightly more each month in auto insurance premiums than to pay less and have to worry about how high their premium will go after an accident, a second accident and so on. There is no reason to live with this completely unnecessary fear.