Does My Premium Go Up If I Make an Insurance Claim?

Does My Premium Go Up If I Make an Insurance Claim?

An insurance company is not supposed to raise your rate or premium solely because you made an insurance claim regarding a crash that is not your fault.

Of course, the reality is more complicated than a general rule. My clients often ask if they make an uninsured or under insured motorist insurance claim will their rates go up. To answer this more fully, we need to first look at the applicable law.

Insurance Claim and Rates
Insurance Companies and Your Premiums

The Law

California Insurance Code Section 1861.02 states in part:

“(a) Rates and premiums for an automobile insurance policy, as described in subdivision (a) of Section 660, shall be determined by application of the following factors in decreasing order of importance:

(1) The insured’s driving safety record.

(2) The number of miles he or she drives annually.

(3) The number of years of driving experience the insured has had.

(4) Those other factors that the commissioner may adopt…”

The same section talks about a Good Driver Discount which an insurance company must provide to anyone that meets the criteria of Insurance Code Section 1861.025. One of the criteria is that you were not “the driver of a motor vehicle involved in an accident that resulted in bodily injury or in the death of any person and was principally at fault. ” Ins. Code Section 1861.025(b)(3).

California Code of Regulations states that an insurance company must use certain rating factors when calculating rates of a policy. The first is the driving safety record which includes “the principally at-fault accidents, as determined pursuant to section 2632.13…” 10 CCR § 2632.5

California Code of Regulations Section 2632.13 describe what it means to be principally at fault, which includes that “an insurer shall not make a determination that a driver is principally at-fault for an accident unless the driver’s actions or omissions were at least 51 percent of the legal cause of the accident…” 10 CCR § 2632.13.

But What Does All That Mean?

What do all these code sections and regulations mean? California strictly regulates the business of insurance and how insurance companies come up with rates. Your safety record is something they can consider when raising rates. The mandatory factors they consider may not be combined with other factors. 10 CCR § 2632.5(e). They cannot consider whether you made a claim related to an accident that is not your fault because it is not one of the factors they are allowed to consider.

Would it have been easier if the insurance code just said they cannot raise your rates if you are making an insurance claim related to an accident that is not your fault. Yes. Why didn’t they do that? I don’t know but probably because some insurance company lobbyist kept it out to made things more confusing and vague. Also, it should be noted that claim frequency and severity are considered which is separate than whether you are at fault.

If it is any consolation, your insurance company is supposed to give you notice if they think you are fault and provide information like the percentage of fault and the basis for the determination. 10 CCR § 2632.13 (e)(1).

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