One of the biggest concerns for drivers involved in accidents is whether their car insurance rates will increase. As a California attorney handling car accident cases, I frequently receive calls from individuals worried about the impact of filing a claim on their insurance premiums.
California Law on Insurance Rate Increases
In California, there are strict regulations governing how insurance companies can adjust rates. These companies consider various factors when determining whether to raise a policyholder’s premium. One of the most critical factors is the driver’s safety record.
If you are not principally at fault (meaning you are less than 51% responsible for the accident), the insurance company cannot use the accident as a reason to increase your rates. Simply being involved in an accident does not automatically justify a rate hike.
Other Reasons Insurance Companies May Increase Rates
Even though an accident where you were not at fault cannot be used as a basis for an increase, insurers can raise rates due to other external factors. For example:
- Economic Changes: Insurance companies periodically adjust their rates based on economic conditions.
- Industry Trends: A general rise in insurance rates across the market may impact your premium.
- Policyholder Risk Factors: Changes in your driving history, location, or even credit score could contribute to higher premiums.
California has recently seen rate increases across the board, regardless of whether drivers have a clean record. However, if your insurer raises your rate specifically because of an accident, you have the right to question them.
Why Filing a Claim Should Not Lead to Higher Rates
Insurance exists to protect you in case of an accident, especially when someone else is at fault. If you file a claim with your insurer, they will often subrogate the claim, meaning they will seek reimbursement from the at-fault party’s insurance provider. Since your insurer recovers their costs, it should not negatively impact your premiums.
Steps to Take If Your Rates Increase Unfairly
If your insurance company raises your rates after an accident, follow these steps:
- Ask for an Explanation: Contact your insurer and request the reason behind the rate increase.
- Provide Evidence: If the insurer claims the increase is due to an accident, present proof that you were not at fault.
- Refer to California Insurance Code: Knowing your rights can help you challenge any unjustified premium hikes. I have compiled the relevant insurance code sections in a blog post, which you can access via the link in the description.
- Consider Shopping for a New Policy: If your insurer remains firm on the increase, it may be beneficial to compare quotes from other providers.
Final Thoughts
California law protects drivers from unfair insurance rate increases following an accident where they were not at fault. If your insurance company raises your rates unjustly, challenge them using the proper legal references. Always stay informed about your rights and don’t hesitate to seek legal advice if needed.
