Insurance premiums can still rise even if you’re not at fault

On Behalf of | Feb 15, 2017 | car accidents

Car insurance premiums are an expense that few people like to pay, but the investment comes in handy when we need coverage the most. In uncertain times, we want to be sure that we can replace the vehicle that is vital to our everyday routine. If the accident was our fault, we probably expect to pay more in insurance premiums, but could we also be paying more when we’re not at fault?

A new study by the Consumer Federation of America, a non-profit consumer interest group, found that some people who were not at fault after an accident still saw annual insurance premiums increase as high as $400. The study also reveals that some insurance companies do, in fact, consider not-at-fault accidents into premium costs.

How are insurance premiums calculated?

When considering insurance costs, every company says their coverage will save you money, but differences in how premiums are calculated by each organization can leave drivers with varying price tags for nearly the same product.

Here are three factors that add to the cost of insurance:

· Location of the driver

· User’s driving record

· Value of the car

Not-at-fault accidents could be a fourth factor some companies consider. Carriers of Geico and Farmers saw premiums increase 10 percent after a not-at-fault accident. Allstate drivers sometimes saw increases. Meanwhile, State Farm carriers saw no increases.

Location is also a big factor in premium cost. Drivers in Chicago saw an average increase of $100 after a not-at-fault accident, but that doesn’t mean drivers in more rural areas were clear from rate increases. In fact, moderate income earners saw bigger jumps in prices than higher income earners.

Not-at-fault accidents resulted in higher rate increases for moderate income earners

Moderate-income drivers paid an average of $208 while higher earners paid $78 more after a not-at-fault accident. This statistic is perhaps concerning to drivers in the Litchfield area, where the median family income is $46,000, 20 percent less than the state median.

The disproportionate rate increase is just another barrier that people in our area face after a crash. How do drivers compensate for increased premiums in addition to the already high cost of an accident? When there’s little assurance from insurance companies, an attorney that specializes in earning compensation for drivers following motor vehicle accidents can get you back on the road.