A car accident causes many headaches. In addition to needing to have their car repaired, many accident victims suffer intense bodily injuries. But there is another hidden cost to an accident—increases in auto insurance premiums.
Yes, if you were involved in an accident, you can expect your premiums to increase. But the amount of any increase will depend on many factors. Below, our Conyers car accident lawyer identifies some of the important facts you need to know.
Yes, You Must Report Accidents
Some people are so worried about any increase in car insurance premiums that they avoid reporting the accident in the first place. Unfortunately, Georgia law removes this option in most cases. Under Georgia Code § 40-6-273, a motorist must report an accident that causes death, bodily injury, or property damage of $500 or more to the nearest police department or to the highway patrol.
The property damage trigger is a very low bar. Today, $500 worth of damage could be anything requiring a trip to the body shop or mechanic. So if you get into a crash, chances are you will need to report it to the state, which means your insurer will find out.
Your Insurance Premiums Increase if You Were at Fault
When it comes to accidents, fault matters. A motorist is at fault for a wreck when they are the reason it occurred. Typically, a motorist was driving in a negligent or reckless manner and caused the crash. Examples include refusing to yield the right of way, tailgating, and passing illegally. Drunk and distracted drivers are also at fault for their accidents.
A police officer who arrives at the scene might assign fault in a police report. But the officer’s opinion doesn’t carry much legal weight, so do not worry if the officer tries to point the finger at you. Instead, insurers will review all evidence to determine fault. If necessary, there might be a trial when the insurance companies involved cannot agree.
Your Premiums Should Not Increase if You Are Not at Fault
What happens if you didn’t cause the accident? For example, say you were stuck in an intersection by a driver who ran a red light. Although you were involved in the crash, you are not the driver at fault.
In this example, you should not see any premium increase if you were not at fault. Indeed, Georgia Code Section 33-9-40 prohibits insurers from increasing premiums for these drivers who are involved in crashes caused by someone else. The law was passed for a reason: some insurers historically tried to pass along increases even to innocent drivers, so the legislature stepped in to prohibit this practice.
The Amount of Any Increase Depends on Many Factors
Let’s say you were at fault for a wreck. Just how much of an increase in premiums are you looking at?
There is no single answer. Instead, what matters is how an insurer assesses risk. Some relevant factors insurers look at include:
- Your age
- Your driving record
- Whether this is your first claim
- How many previous claims you have
- How much damage did you cause in the accident
- Whether someone was injured in the accident
Some studies have been done on this issue. For example, CBS News performed a study that showed premiums increasing 41% for a driver who made a single claim on their insurance policy. The website insure.com saw a 40% increase in premiums for a claim with bodily injury in Georgia.
Interestingly, Georgia was on the high end for increases when looking at all 50 states. By contrast, Mississippi saw only a tiny average increase of 14% after filing a bodily injury claim.
Increased Premiums Can Last for Years
To fully understand the true cost of an accident, you need to understand how long your premium increase will last. According to some sources, insurers typically charge increased premiums for at least three years.
That can add up quickly. Let’s say you paid $100 a month before the accident, which jacks your rates up to $140 a month. That is an extra $480 over one year. But if your insurer charges increased premiums for three years, you could end up paying close to an extra $1,500 in premium increases. That is almost as much as a down payment on a car!
Some Insurers Forgive Your First Claim
Not all insurers increase premiums following an at-fault wreck. In fact, so-called “accident forgiveness” is a selling point for many insurers. All-State is one of the nationwide insurers which cut commercials touting its accident forgiveness policies.
Even if you have accident forgiveness, however, pay attention to the details. For one thing, you might have had to pay an increase in premiums to get accident forgiveness in the first place. According to Investopedia, some drivers pay a 9% increase just to get an accident forgiveness rider. That’s money coming out of your pocket whether you get into an accident or not.
Other policies are limited as to which driver they cover, or they only apply if an accident doesn’t exceed a certain dollar amount. These limitations could leave drivers in a lurch if they get into an accident expecting it to be forgiven.
How to Keep Premium Increases Low
If you are in an accident, there is no reason to immediately accept high insurance premiums:
- Fight the claim. The other driver might unfairly be trying to pin blame on you. If you were not at fault, an attorney can help you negotiate with the insurance companies to assign fault correctly.
- Shop around for a new policy. Nothing says you must stay with your current insurer. There might be a competitor offering lower premiums. With the internet, shopping for car insurance has never been easier.
- Accept a higher deductible. This does shift more risk to the driver. But if you are committed to driving safer in the future, then you might be able to save money with a high-deductible plan.
Contact a Car Accident Lawyer Today
MG Law is ready to help you negotiate a favorable outcome to a car accident claim. We will happily meet with you to discuss your case. Call or contact us online to schedule a free consultation.