After a car accident, you may be most concerned about your injuries and vehicle damage. However, another potential concern for many auto accident victims is whether their auto insurance will increase after the accident. According to Wallethub.com, auto insurance rates may increase by 40 percent or 50 percent on average after an accident. On average, you can expect your insurance premium to rise by $830 if you are liable for an accident. However, how much your rates go up and whether they do depend on many factors.
We will explore this question below about rate increases after a car accident. If you have questions about auto insurance rates after an auto accident or need guidance on seeking compensation, an experienced car accident attorney can provide the answers and legal support you need. They can help navigate the complexities of insurance claims and pursue the compensation you deserve, especially if another driver is at fault.
- Understanding No-Fault Insurance Systems
- Why Does Auto Insurance Go Up After An Auto Accident?
- Will Your Rates Increase If You Weren’t At Fault?
- How Long Can An Accident Increase Your Auto Insurance Rates?
- How Can You Lower Your Auto Insurance Premiums After An Accident?
- How Do You File An Accident Claim?
- Can You Review Your Driving Record?
- Contact a Car Accident Attorney Now
Understanding No-Fault Insurance Systems
In many states, you should understand the no-fault insurance laws before fully understanding how an accident can increase your rates. For example, Michigan is one of the nation’s few states with a no-fault accident law. This means that every licensed driver has to have personal injury protection (PIP) and property protection insurance (PPI). These insurance coverages should guarantee that a driver can get compensation for accident injuries and damages no matter who was at fault in a car accident. However, many people have difficulty obtaining no-fault benefits without the representation of an attorney.
PIP is a mandatory type of auto insurance in no-fault states like Michigan. Regardless of fault, it gives all drivers payments for medical costs and lost earnings from a car accident. Your PIP insurance may offer up to $10,000 for reasonable medical and hospital costs for each person hurt in the accident. The insurance can be accessed for up to three years after the crash. Depending on the coverage level you signed up for, you can have a lower amount of coverage.
Before 2020, all PIP policies in Michigan offered unlimited medical benefits. But for plans after July 1, 2020, unlimited coverage is only one of the options to choose from. Other options include coverage amounts of $50,000, $250,000, and $500,000. There also is an opt-out for medical benefits for drivers who are on Medicare. Also, if you are disabled after your accident, your PIP will pay for the income you have lost. There is a monthly maximum, and benefits are not treated as taxable income, so payments are roughly 85 percent of your regular income.
PPI is liability coverage that offers as much as $1 million to help cover expenses if you cause damages to another person’s property in Michigan. This coverage, like PIP, is mandatory in Michigan, but you can pay for a lower level of coverage.
Why Does Auto Insurance Go Up After An Auto Accident?
Policy rates can be different based on the insurance company and the state. When you sign up with a new insurance company, they will examine many factors to decide your rate: how long you have been driving, your driving record, and your vehicle.
What the insurance company is doing is assessing how much risk you are. If you are considered a high-risk driver, they will charge you more in premiums. This process also determines rates after a car accident. Being involved in a car accident means your insurance company will likely find you a higher risk. This may mean higher rates. However, most insurance providers will only hike your rates when they renew the policy every six months or annually.
The typical auto insurance increase after a crash is about 48 percent. But remember, this is for the person at fault for the accident. If you were at fault for the accident, it’s obvious that the insurance company can deem you to be a higher risk. If the crash caused significant damage and injuries, you can get a much higher premium if you caused the accident.
Will Your Rates Increase If You Weren’t At Fault?
You might not see a rate increase if you didn’t cause a car accident. It depends on your insurance company, driving history, and other factors. On average, rates increase by about four percent in this situation, depending on the state and insurance provider. Some states do not let insurance companies raise your rates for a not-at-fault accident.
Furthermore, even if you didn’t cause the crash, your insurance company still may have to pay. A no-fault law means your insurance company must pay for your initial injuries and damages through your PIP coverage, regardless of who was at fault. Also, if a driver hits you without insurance, your auto insurance policy may have to pay for your damages. Your insurance provider will consider these added expenses when determining your premium.
Statistics also show that auto insurance rate increases in Michigan tend to be higher than in most states when that driver was at fault. In some cases, at-fault drivers find that their rates are doubled!
How Can You Lower Your Auto Insurance Premiums After An Accident?
Insurance rates increasing after an accident can be annoying, especially when you didn’t cause the accident. But, as we said above, Michigan does have a no-fault law, so your insurance provider can still have to pay damages to you when you didn’t cause the accident, which can still raise your rates in some instances. Fortunately, several proven strategies can help to lower your rates:
- Shop with different insurance companies: Remember, your rate should only increase when you renew your insurance policy. So, if you think that your provider will hike your premiums, you can shop around with other insurance companies. When you speak to other insurance providers, point out if you had a car accident caused by another driver.
- Change your current policy: Regarding auto insurance, paying as much as you can afford is best. However, the law only requires you to carry a certain amount of coverage. If your rates rise after a not-at-fault accident, you may review your auto insurance policy and opt for lower coverage, which can lower your rates.
- Join a safe driver program: Many auto insurance companies offer a safe driver program that can let you lower your premiums if you take a driver safety class. After a certain period is over, if you can show you haven’t had tickets or accidents, you can qualify for a discount.
- Take defensive driving classes: Some insurers also offer rate discounts for people who take defensive driving classes.
Unfortunately, no laws stop your insurance company from hiking your premiums even if you didn’t cause the accident. Car accident attorneys often hear this complaint, and it’s completely understandable. But without a law against it, your insurance company can increase your rates for any reason. The best action to take is to follow our advice above by comparing rates, reducing coverage, and trying to qualify for discounts.
How Do You File An Accident Claim?
If you’re in a car accident, regardless of fault, you should file a no-fault application with your insurance company within a year of the crash. If you don’t file the claim on time, you may be unable to claim for no-fault benefits.
While your own insurance policy should handle your initial injuries and damages, some situations may allow you to file a lawsuit against the at-fault driver for pain and suffering. You also can sue your insurance company if they do not pay your no-fault benefits.
To sue the liable driver for pain and suffering, you must show that their negligence caused the accident. Also, your injuries must have led to you suffering a ‘serious impairment of body function.’ Your general ability to lead a regular life has been compromised. Proving that you have this severe of an injury is difficult on your own, but a skilled car accident attorney can support you.
Can You Review Your Driving Record?
Understandably, the state’s no-fault laws can create concerns and questions about insurance rate increases and liability after auto accidents. That’s why government agencies like the Michigan Secretary of State have databases that drivers and insurance companies can review to check driving records.
You can use the state’s online reporting system to see your driving record. If you haven’t done it already, the first step to reviewing your driving record is to set up an account and verify your identity. But if you want to get this information in person, you can visit the Secretary of State’s local office in your area. There is a $12 fee to get a copy of your driving record.
You also can obtain information about your driving record through two services that auto insurance companies often use to determine rates. The first is the A-Plus system, which has details on auto insurance claims you have filed in the past. This system will give you one free report every year. It’s smart to get a copy of this report annually to ensure you aren’t being blamed for an accident you didn’t cause, which can hike your rates dramatically.
To get your A-Plus system report, you must request online and provide your driver’s license number, insurance policy number, current mailing address, VINs for all autos you own, and the same information for anyone else on your policy.
Insurance companies often use the Comprehensive Loss Underwriting Exchange (CLUE) system to rate potential clients. CLUE offers historical driving information going back as much as seven years for auto accident claims and payouts from insurance companies. You can complete a request for this information online, and it doesn’t require as much identifying information as the A-Plus system. However, you still have to enter your Social Security number, date of birth, and driver’s license number.
If every other option fails and your insurance rates are spiking, you can contact the state insurance commissioner’s office. You can also make a call to the state Auto Insurance Placement Facility, which helps people who qualify for insurance but cannot find a reasonably priced policy through the market.
Contact a Car Accident Attorney Now
If another driver hit and injured you recently, you might wonder what to do next. Will your insurance go up if you report the accident? How will you get fair compensation for your injuries? Trying to get a fair settlement from your or another insurance company can be daunting. Insurance companies usually like to work with injured drivers without lawyers. That way, they may persuade you to take less money than you deserve in a claim or lawsuit. But with the help of an experienced car accident attorney, you can often get fair compensation for your losses.
After getting medical treatment, the first thing to do is call a personal injury attorney in Michigan. Experienced attorneys can get the compensation you deserve and sue the other party if another driver is at fault. Your attorney can also work with your personal auto insurance provider to ensure you get the PIP benefits you are entitled to without an increase in premiums when possible.
Please seek a free, confidential legal consultation with a car accident attorney near you. Time is of the essence, so do not wait.