When you suffer an accident that was caused by someone else you would be angry with them and worry about its consequences. Initial concerns would be who pays and what happens to renewal quotes. Would the premium go up or stay the same? Do insurance rates go up after no-fault accident, anyway? This post will look at various scenarios and try to clarify the position.
Does Insurance Go up if it’s not your Fault?
There isn’t a one quick response that will satisfy everyone. To answer this question we need to look at how the liability is determined and who compensates the damages. Let’s have a look at how it may play out and what might happen at the end.
Scenario 1: If the other party is deemed to be fully responsible for the incident and agrees to settle this would save you a lot of hassle. It doesn’t matter where the settlement comes from as long as it is a third party. If someone else was responsible and the underwriter haven’t paid a dime there is no reason why car insurance rates should increase. Just be on the look at, in case they may try to take advantage of the situation for whatever reason.
Scenario 2: If the damages are not being paid or the other side is unresponsive you may need to make a claim on your own Collision Coverage. Once they compensate the losses they may go after the liable drivers or their carriers. If they can successfully recover the money they spent the incident can go down as no fault accident. In such cases, you would be refunded the deductible you paid due to the fact that it was a claim you had to make. This outcome would reduce the upward pressure on vehicle insurance premiums. See below what happens when they cannot recover any money.
Why Do Insurance Rates Go Up after No-fault Accident?
Every incident has the potential to cause price increase, which can be small or large depending on circumstances. If you are not getting the discounts you used to get it means rates are affected by the recent accident. Even though you are totally innocent in this, the underwriter will still have to consider the fact that they lost money if they fail to recover the claim payment they had to make in the above scenario.
The situation is totally different in no-fault states where you may not be allowed to claim on third parties. Then, your insurer will have to cover it even though you were totally innocent and it will potentially increase the premium. Who was responsible is still determined even though it won’t matter in terms of settlements. Therefore, how much the renewal quotation will go up may still depend on who was liable for the crash.
Furthermore, all parties involved in a vehicular crash may be comparatively flawed. You may not be the person who caused it but something you did may have contributed to the collision. When the fault is shared between parties involved who pays for the claims depends on the state laws. For example, some states would split the damages according to comparative fault while other states may have a cut off point before your contribution to incident can be considered material. If they end up settling even a small portion they will put auto insurance rates up accordingly.
If you end up getting a moving violation ticket after the incident you won’t be pleased with its effect on future quotes. Police is likely to be involved in serious accidents with damages and injuries. Also, they may be involved in minor cases and prepare a report and it may follow up with a citation. This is highly likely to affect rates too.
How Much Does No Fault Claim Affect Insurance?
Many policyholders are scared that all of them will increase premiums. This is not true because some don’t influence it. The effects of any claim on policy prices depend on several factors as discussed below.
1. Who Pays for the Claim: As shown on Scenario 1 and 2 above, rates should stay the same when they eventually don’t spend any money. They don’t lose money and therefore they have no reason for wanting to charge you more. The whole game is about the costs and ways of recouping them back.
If you end up applying to own insurer for the damages even it was someone else’s liability the premium is likely to go up and the following factors may increase or reduce the effect on quotes.
2. The Size: Smaller claims of under $2,000 usually affect rates less. The amount of money paid out does affect underwriters’ decision as to how much to put the prices up.
3. Number of Previous Claims: If this comes after several others it is difficult to explain that the latest one was just an unfortunate case of wrong place and time. Usually, the first one is considered a bit more leniently while the consequent ones can even result in refusal of auto insurance renewal.
4. Driving Record: If you are a teenage driver the premium may be affected even it was a total no-fault collision. You may not see a price hike but it is an increase when it doesn’t go down the way it should. They can be more lenient if you have been driving for a long time and have a clean record.
5. The State: Local laws can prevent or allow companies to apply surcharges or offer discounts in certain cases. Also, nearly all claims will affect vehicle insurance rates if you live in a no-fault state as explained above.
Possibilities following a Collision that Was Not Your Fault
After an accident caused by third parties you should first consider making them pay by applying directly to them or their providers. If they accept the responsibility and happy to settle whichever way you may not even need to bother yours. It may not be a big issue that the carrier finds out about it as they should let it pass without price rise. It is pretty straightforward when the other motorists accept and deal with it.
However these things are not usually straightforward. It is possible to allocate the blame proportionately as mentioned above. While the other parties are 80% responsible you may share 20% of the blame and the damages can be settled according to these proportions. Other drivers may accept partial liability but blame you too. In such cases, you may need to get them involved and both companies will agree on a settlement.
What Happens When At-fault Drivers Don’t Co-operate?
Liable third parties may decide to bury their heads in the sand and ignore all attempts to contact them. Then, it may be necessary to play hard balls and your insurer will most likely take the necessary actions, providing you have coverage. Collision Coverage would normally allow you to make a claim if the third parties are slow in paying or ignoring it totally. It is disappointing but often happens with these cases.
It is understandable if you want the vehicle repaired quickly and get back to normalcy as soon as possible. The others may be hoping that you will get tired and get lost. However, the carrier isn’t likely to give up on recouping their money even after they paid you. Most of them try to recover the money paid out to policyholders from third party people or carriers once their fault is established.
Once the repairs are done to the vehicle you would need to pay the deductible. Should they recover all the claim costs they would return the deductible back to you and you should be able to keep cheap automobile insurance rates.
The portion of blame and weather your carrier can subrogate the losses will affect how much the premium will go up. When third parties are to be fully blamed and the company recover the whole losses they are unlikely to increase rates or it would be slight.
If you see unreasonable car insurance premium hike after no fault accident you should remember that there are plenty other cheaper companies. Actually, you should always get alternative quotes at each renewal to compare prices, coverage and sources. Today, it is pretty quick to shop and buy policies online and many people save enough money to switch.
These are the moments some companies take as their chance to shine and come to help. In the same way, it is an opportunity for you to see how good they are in dealing with issues. Everyone can collect the money like clockwork but not all can give value for it.