I was reviewing a car insurance quote with a woman from Richardson last week, and she asked me a question after I confirmed her claims history. She had one claim for an accident that wasn’t her fault. Her question was, does an accident that wasn’t her fault still count against her?
This question pops up a lot, as most people aren’t aware that all claims, whether at fault or not at fault, have some level of impact on their car insurance rate. The level of impact varies from one insurance company to the next, but most factor any claim into their computation of premium.
One of the reasons even an accident that isn’t your fault impacts the car insurance premium, or cost, is that it generally removes a claims free discount when this is the only claim that pops up. In addition to removing this discount, your rate may increase due to four factors; claim cost, bodily injury, frequency, and other incidents.
Car insurance companies use the cost of a claim, how much was paid to repair your car, to determine its impact on the rate. The more expensive the claim, the greater the weight it carries. The opposite is also true, as one of my companies minimizes the weight of claims that are less than $1,000.
If you’re injured in an accident, there will be two payments on the claim; one for bodily injury, the other for property damage. Any claim involving bodily injury will impact the cost of the car insurance.
How many accidents a person has in a given time period also impacts your rate. A former co-worker of mine, was hit three times in a two year period. Even though none of the accidents were her fault, the company she was insured with raised her rate due to the frequency, as well as, the number of claims of accidents she was involved in.
How long a not at fault accident counts against you depends on the insurance company. There are still a few companies that only look back three years, however, most look at a five year history. What the impact is also depends on the carrier, but depending on the four factors, the average increase on a Texas car insurance policy is between 2% and 28%.
The woman from Richardson I met with didn’t like the reason – it seems unfair. I understand, but it is the reality of Texas car insurance today. She still became a client since we were able to save her $300 a year, but the savings would have been more had there not been that one claim. Do you think it’s unfair? Share your thoughts, suggestions, and experiences with me on our Google +, Facebook, or LinkedIn pages. I’d love to hear from you!