If you’ve recently been involved in a car accident, you have a lot to worry about. You may be injured and unable to work, impacting your financial situation. This may also cause you to wonder, “How do accidents affect insurance?”
Many drivers worry that they will experience a car insurance rate increase after an accident. It is certainly possible to experience an insurance premium rise post-accident but it will depend on a variety of factors.
Angel Reyes & Associates is a personal injury law firm in Texas committed to providing 5-star legal representation for car accident victims. In this blog post, we discuss how accidents affect insurance and how a car accident lawyer can help in these situations.
Factors Influencing Rate Increases
Car insurance rates are determined by numerous factors including location, type of vehicle, insurance score, age of the driver, driving history, and previous claims. These rates can also be affected by the severity of the accident and whether or not you were at fault.
Car insurance premiums are ultimately calculated based on anticipated risk and the rates will vary between companies. One insurer may argue that if you’ve been involved in one or more accidents, then you are a higher risk, even if these accidents weren’t your fault.
Some companies only increase their premiums for drivers who were at fault in accidents while others will increase rates regardless of fault. It will also depend on whether or not you have an accident forgiveness policy, which may be offered by your insurer. Insurers will generally look at the previous three to five years of a driver’s record to help them determine rates that mitigate their risk of insuring a policyholder.
It helps to take a deeper look at the factors that affect insurance premiums:
Accident Severity
A minor accident with little to no damage and no injuries may cause insurance to increase slightly. Meanwhile, a major accident that results in a totaled vehicle and serious injuries could substantially hike premiums.
Driving Record
A driver with no history of accidents or violations will be less likely to have a large increase after their first accident.
Texas Regulations
Even though insurers can increase insurance premiums, the state requires justification for any increases. This typically means that at-fault drivers will be most impacted by rate increases due to their higher risks.
Insurance Company Policies
Every insurance company varies widely on their policy offerings. Some will be cheaper than others while some policies from the same company will be more or less expensive, depending on the other factors involved. Additionally, when there are accident forgiveness programs, they can prevent rate hikes in certain circumstances.
Driver Age and Gender
Younger drivers are less experienced and are often more expensive to insure since they are a greater risk. Gender is a factor too, as male drivers will have higher rates under the age of 25. Conversely, older drivers above the age of 70 may also incur higher rates because they are at greater risk of an accident and will have higher medical costs to treat their injuries.
Vehicle Type
Drivers with expensive, high-performance vehicles will typically have higher insurance premiums after an accident. This is partly a result of the greater expense to repair these types of vehicles. Similarly, any vehicle that is driven for long commutes may be subject to these hikes for repair costs as well as greater risks.
Average Rate Increase
Based on data provided by U.S. News, the rates for insurance after an accident average an increase of $872 per year. Some insurance companies like Nationwide, State Farm, Geico, and Progressive are in the range of $2,400 to $2,800 while both Allstate and Farmers are closer to $5,000 for the average annual rate increase after an accident.
Overall, these increases are about 40% higher than rates for drivers who have not been in any accidents. If you were obeying traffic laws and driving safely, there may have been nothing you could have done to prevent an accident from happening. If you were involved in an accident that you didn’t cause, it hardly seems fair that you should be punished with higher rates. That is why it is advisable to understand your insurance policy and your legal rights after an accident.
Mitigating the Impact
If you are worried about a car insurance rate increase after an accident, it helps to know the steps to take to protect your legal rights. You’ll be less likely to have an insurance premium rise post-accident if you are not at fault.
Call the Police
Texas laws require you to notify law enforcement when you are in an accident that causes injuries, fatalities, property damage of over $1,000, or the vehicles cannot be moved after the impact. When police officers arrive, they will complete a police report that details their findings.
If they’ve issued a citation to the other driver for their role in the crash, it will likely be noted in this report. This is just one piece of evidence that can help prove that you were not to blame for the accident.
Get Medical Care
After a car accident, it is vital that you seek medical attention for your injuries. The at-fault driver will be held liable for paying your medical bills and the damages they’ve caused. With your medical records, you can also show the severity and extent of your injuries.
Gather Evidence
Even though the police will take photos and videos of the accident scene, you should do the same if you are capable. Speaking with witnesses and getting their statements can also show the insurance company that you were driving safely when the other driver negligently crashed into your vehicle.
Report the Accident to Your Insurance Company
No matter who is at fault, you are required to inform your insurer of the car accident. Since Texas is an at-fault state, your insurer and the other driver’s insurance company will investigate the accident.
The situation can become complicated because Texas uses a modified comparative fault model. If you are 51% or more at fault, you will be barred from collecting damages and any percentage below that will reduce your compensation by that amount.
Essentially, insurance companies at their core are about protecting their profits and they will find ways to reduce the amount they need to pay. They also reserve the right to increase your rates. In Texas, even car accident victims who have absolutely no percentage of fault may see their premiums rise. This can happen even if you do not file a claim.
Hire a Car Accident Attorney to Take Over Your Case
You have enough to worry about with painful injuries and the mental toll they can take, along with the financial impacts after your car accident. Negotiating with insurance companies can be challenging for many victims because insurance adjusters are trained to seem sympathetic. It’s a tactic they use to get you to open up and talk more about the accident.
In these conversations, they may ask leading questions or twist your words to pin some of the fault on you. They can then use this as justification for a reduced payout, denying your claim and giving you one more thing to worry about – a car insurance rate increase after an accident.
With legal assistance, you can reduce your risk of being blamed for the accident and have someone on your side to manage rate hikes. Your car accident attorney will protect your rights, challenge unfair rate increases, and work to maximize the compensation you should receive.
Legal Support from Angel Reyes & Associates
After a car accident that isn’t your fault, it is important to get legal counsel to help you handle insurance claims. Unfortunately, many car crash victims in Texas try to handle these negotiations with the insurance companies on their own, resulting in either a quick offer for a low settlement or a denial of their claim.
When a low settlement is offered, most victims do not think about the full extent of the losses that the negligent driver caused. They may only consider their immediate medical expenses but not the ongoing or future costs of their medical care. Lost wages may not cross their mind because they don’t yet realize how much income they will lose as a result of their injuries.
With a car accident attorney to represent you, you will have someone on your side to negotiate with the insurance company from the start. It can make all the difference in the world when it comes to recovering compensation and preventing unjust rate hikes on your auto insurance.
Essentially, you may be subjected to rate increases on your insurance premiums after an accident even if it wasn’t your fault. In most cases, increases will be reserved for those who had partial or full blame for the crash. Protect your legal rights and discuss your accident with a car accident lawyer to help manage post-accident insurance issues.
