After you’ve been involved in a car accident, many insurance companies will automatically raise your rates—even if you did not cause the accident. Dealing with rate increases can add a financial burden to a household that may already suffer from multiple financial struggles following a severe accident. How much should you expect your rates to increase after a car accident? Read on for more information from the experienced Orlando car accident attorneys at Michael T. Gibson, P.A., Auto Justice Attorney.
Factors That Influence Car Insurance Rate Increases After an Accident
The amount that your insurance payments increase after a car accident will depend on a variety of factors. Consult your insurance company directly to learn how much you can expect your rates to increase, how long the increase will last, and any other changes in insurance that you should expect after a serious car accident.
In Florida, you may expect your insurance to increase by an average of 35 percent following an auto accident. Many factors, however, can influence the exact amount by which your insurance payments increase. Influencing factors include:
Who Caused Your Accident?
If someone else caused your accident, some insurance companies will not raise your rates. Others, however, will impose upon you the same rate increase that they would an at-fault driver. If you caused or contributed to even a small percentage of your accident, according to the police report, you should expect a rate increase.
If You Needed to File a Claim With Your Insurance Company Concerning the Accident
Even if you did not cause the accident, you may need to use your insurance company to cover financial losses related to your accident under the state’s no-fault/personal injury protection insurance laws.
For example, you may need to file a claim through your auto insurance company if:
- The other driver did not carry auto insurance, and you carry uninsured motorist coverage. Uninsured motorist coverage usually adds a comparatively small cost to your overall insurance coverage, but it can provide vital protection if you have an accident with a driver who does not carry insurance. In Florida, as many as one in four drivers do not carry auto insurance. If you suffer an accident with one of these drivers, you may need your uninsured motorist coverage to help cover the cost of repairs to your vehicle as well as the cost of any injuries you suffer in an accident.
- The other driver did not carry adequate insurance to cover your financial losses. In Florida, drivers must carry personal injury liability insurance of at least $10,000, as well as property damage liability insurance of a minimum of $10,000. Unfortunately, in many cases, that might not provide adequate compensation for the financial losses that an individual faces after an accident. For example, if you own a vehicle worth more than $10,000, and it gets totaled in your accident, you may need to turn to your underinsured motorist policy to help provide the coverage you need to replace your vehicle.
- You needed to use your personal injury protection insurance due to injuries from the auto accident. Your personal injury protection insurance provides the first layer of coverage for serious injuries in an auto accident. Most people carry at least a $1,000 deductible on personal injury protection insurance, which means you will not need to use it if you suffer only minor injuries in the accident. Unfortunately, if you suffer serious injuries, you must use your personal injury protection insurance before you look to the other driver’s insurance company or the insurance company that covers another party liable for your accident. If you used a substantial amount of your personal injury protection insurance, especially if you use the maximum amount offered by your policy to cover your injuries and your lost hours at work after an accident, your insurance company may raise your rates.
How Many Accidents Are on Your Driving Record
Some insurance companies have accident forgiveness policies that prevent drivers from facing immediate increases due to one minor auto accident. If you do not have a history of auto accidents, especially within the last few years or the time you have received coverage from a specific company, you may not see a significant increase in your auto insurance rates. If, on the other hand, you have a couple of accidents within a short period of time or if you have a history of multiple accidents, you may notice your auto insurance increasing accordingly.
You may also notice a larger increase in your rates following multiple accidents than after a single accident. After one accident, you may see a relatively minor increase in your insurance rates, depending on your insurance company. If, on the other hand, you have a second accident or suffer more accidents, your rates may go up even more. If you have numerous accidents, your insurance company may refuse to provide continued coverage for you, forcing you to shop around for a new insurance company.
The Severity of the Accident
Following a minor fender bender, many insurance companies will offer accident forgiveness. If you suffered damages small enough that you do not need to use your insurance, then you should still report the accident to your insurance company, but you may not see a corresponding rate increase. On the other hand, a severe accident may send your insurance rates skyrocketing.
The Company That Provides Your Insurance Coverage
Some companies offer incredibly strict policies related to how much an accident will increase your auto insurance. Others may have policies that allow some leeway from one individual to the next. You may find that large, nationwide auto insurance companies offer less leeway than smaller companies, since big companies often tie their representatives’ hands and make it difficult for them to assist their clients when it comes to accident forgiveness.
How Long You Have Used a Specific Insurance Company.
Depending on your insurance company, your relationship with the people in the office can make a big difference in rate increases after an accident. If you have had the same insurance company for a long time without a substantial accident history, you may see smaller increases in your overall insurance rates than if, for example, you have recently opened a new insurance policy.
What You Can Do About Increasing Insurance Rates
Insurance rate increases may leave you and your family struggling financially, especially with all of the other bills that you have to pay in addition to your auto insurance. Fortunately, you can often find a solution for rate increases. Consider the following strategies:
Talk to Your Company
While many insurers cannot do much about rate increases following an accident, you should at least attempt to work with your agent to negotiate your rate change. Sometimes, an agent can decrease the addition to your rates, especially if you do not have a substantial accident history, and you do have a long history with the company. Contact your insurance agent to discuss how the accident impacts your rates and see what you can do to lower your rates. The agent may also offer solutions that your insurance company will accept to lower your rates in general.
For example, you may choose to:
- Change your insurance coverage. If you purchase a used vehicle and pay it off, for example, you might choose to drop your full coverage insurance to make it easier to pay your bills, especially if you face significant rate increase after an accident. You may also want to drop some of the riders on your policy, especially those that make a significant impact on your insurance bill. An experienced agent can suggest what changes you should make to your insurance policy to help decrease your rates without creating gaps in your coverage that may prove catastrophic if you are involved in another accident.
- Take a class to reduce points on your license. Some insurance companies may offer their own driver education courses. In other cases, you can find state-sponsored programs that will help you learn how to drive more defensively or avoid common accident risks. Your insurance company may allow you to take these classes to reduce your rates.
- Consider your new vehicle carefully. Severe accidents can quickly cause enough damage to vehicles, especially modern vehicles, to completely total those vehicles. You may need to purchase a new vehicle to replace the one you lost. If you carry full coverage insurance, in particular, the vehicle you choose may make a big difference in the cost of your insurance policy. Make sure you understand what increases you may face in your new insurance policy before making a purchase. Also, keep in mind that if you keep your existing insurance policy, you may not have to pay increases until the policy rolls over into a new billing cycle; however, you may have to pay immediately if you need to open a new insurance policy due to a new vehicle purchase.
The increase you will see on your insurance policy will depend heavily on the company you use for your coverage. In fact, you may notice drastic differences between coverage from one company and another, even without an accident on your record. With an accident on your record, the difference may appear even more pronounced. Before automatically choosing your existing insurance company for your new insurance policy, or for continuing coverage after an accident, contact several companies and compare all of their rates.
Make sure you consider the amount of coverage you will receive, as well as the type of coverage offered, when you shop around for insurance. Some insurance companies may appear to offer considerably lower rates, but ultimately not offer the coverage and protection you need if you face a serious accident, especially an accident with another driver who does not have insurance. Consider the difference between comprehensive and full coverage insurance, as well as the riders that go on your policy.
You may also want to carefully consider the reputation of the insurance company you ultimately choose. While some insurance companies make it difficult to get the reimbursement that you need and deserve after an accident, others have a streamlined approval process that makes it easy for you to get those much-needed funds in your hands. Doing your research will allow you to choose a reasonable and effective insurance company for your needs.
Include Insurance Increases as Part of Your Car Accident Claim
Your car accident claim should include all of the financial losses that you suffer as a result of your auto accident, not just property damage and the bills you face due to your injuries, but also all of the other expenses that you face after the accident, including increases in your insurance rates.
To help receive compensation for those losses, you should take the following steps:
- Consult your insurance company about rate increases. Ask for information about how much your insurance has increased as a result of the accident directly, rather than due to other reasons. Your annual rate increase does not count as part of your car accident claim, but any increases you face due to the accident should factor into your car accident claim.
- Call a broker or agent and ask for a competitive quote. If your insurance is increasing due to an accident someone else caused you, shop around and see if you can find a lower rate.
- Contact an experienced car accident attorney. A car accident attorney will offer valuable advice about all of your accident-related expenses, including the increased cost of insurance after an accident. A car wreck lawyer should include these elements in any demands. Not only that, but also an attorney can help identify all parties who contributed to your accident, which, for many people, increases the compensation that they ultimately receive for their expenses.
Contact a Car Accident Lawyer for More Information
Do you have questions about auto insurance increases after an accident, including how to decrease your personal costs due to an accident that occurred due to another party’s negligence? An experienced auto accident attorney can provide valuable advice that will help you make critical decisions about your car crash claim as well as your insurance company.
Michael T. Gibson, P.A., Auto Justice Attorney
2420 S. Lakemont Avenue, Suite 150
Orlando, FL 32814