Will my rates go up? How auto insurance claims affect your rates

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One of the most common questions I get from clients that have been in a car accident is, "will my auto insurance rates go up?"

It's a reasonable question. Our auto insurance rates rise from year to year even when nothing happens. When something does happen, even if it's not their fault, many people worry they'll pay a higher premium.

Whether your auto insurance rates go up after a claim depends on the circumstances surrounding the claim. Here are a few common scenarios that will and won't affect your auto insurance rates.

The accident was your fault.

If the accident is your fault or more than 50% your fault, usually your rates will rise. However, if you pay for "accident forgiveness" coverage, which protects you from a rate hike in your first accident, your rates probably won't go up.

Moving violations.

If you're ticketed for a moving violation such as speeding or running a stop sign, your rates may go up. Why? The insurance company views you as a higher risk customer that's more likely to get into an accident.

Depending on the circumstances, you may be able to enroll in traffic school or attend a defensive driving course to get the ticket erased from your record. You can also try disputing the charges in court. If the judge finds you not guilty, you may get your driving record adjusted. If you'd rather not take the risk, pay for traffic school.

Auto theft.

It doesn't seem fair that your auto insurance rates will go up if your car was stolen, but they can. You'll likely file a claim to recover the cost of your stolen auto, which means the insurance company will have to pay out on the claim. Hence, the rate hike.

You move.

If you move to a neighborhood with higher crime rates, you may see a spike in your insurance premiums. That's because you're more likely to experience an auto-related crime, such as theft. So before you move to a new apartment or buy a home, research the crime rates.

What won't affect your auto insurance rates

You can take advantage of your auto insurance benefits without seeing a rate increase. A few situations that won't affect your rates include:

• An accident that is less than 50% your fault. Note: some insurance companies may raise your rates anyway, determining you're statistically more likely to get in an accident. And if you live in a no-fault state (California is not one of them), both insurance companies cover some of the costs, which means your rates could rise regardless.

• Using uninsured/underinsured motorist coverage (UM/UIM). If you get into an accident with a driver that has no or very little insurance, your UM/UIM coverage kicks in to cover the costs. Your rates shouldn't go up if you use this coverage.

• Using medical payments coverage.

• Car repairs. If your insurance company covers your vehicle repairs, provided the accident was not your fault, your rates will not rise.

Keep in mind every insurer has different policies that determine whether it raises your rates. Some raise rates if even a small amount of damage occurs to your car. Others don't. Some companies may not raise your rates if you have a long history with the company and a good driving record.

Your best defense against unwanted rate hikes? Drive safely and maintain a spotless driving record. If you get stuck with a speeding ticket, pay the money for traffic school. It will save you hundreds of dollars over time.

If you get into a serious accident, follow these tipsto get an accurate record of events and call a personal injury lawyeras soon as you can. Most of us will give you a free consultation.

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David G. Smith, Attorney At Law
2201 Broadway
Penthouse 1
Oakland, CA 94612

Phone: 510-431-2598
Fax: 510-893-2701
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