Insurance Rates in Uninsured Underinsured Motorist Coverage

Worrying about insurance rate hikes after a car crash or motorcycle accident is normal. Insurance agents and adjusters will try to dissuade you from the service you are rightfully paying for and cause you more pain and suffering by telling you your insurance rate will increase.

This tactic is typically used to save the insurance company money and avoid the complexities of the legal process during a personal injury or car accident claim.

Fortunately, in California, it is illegal to raise insurance rates after a non-fault accident claim, including those involving uninsured/underinsured (UM/UIM) motorist coverage or any other car insurance types. Proposition 103 legally binds insurance companies against penalizing customers for utilizing their UM/UIM coverage.

This article discusses why you need uninsured underinsured motorist coverage and whether your insurance rates will increase if you file a claim using your UM/UIM coverage.

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Why You Need UM/UIM Coverage and When to Use It

UM/UIM coverage is necessary if you are involved in an accident with a driver who has inadequate or no insurance. Despite some insurance agents downplaying its importance, this coverage can significantly affect your financial recovery.

Example Scenario: Imagine being T-boned at an intersection by an uninsured driver. You could face out-of-pocket medical bills and vehicle repair expenses without uninsured underinsured motorist coverage. 

Although the state of California requires people to have insurance, the Insurance Information Institute (III) discovered that about 16% of all California motorists do not have an insured vehicle, ranking 10th in the top 10 states with the highest percentage of uninsured motorists. 

To protect yourself from an incident in which the other party consists of drivers without insurance, you should acquire uninsured motorist bodily injury coverage. Without it, unless you successfully sue the other party, all costs of the accident will become out-of-pocket expenses. With uninsured motorist coverage, you’ll be compensated even if the other party cannot pay for it.

The same applies to uninsured motorist property damage coverage. If the damages to your car, lost wages, and medical expenses go beyond the at-fault party’s liability coverage limit, underinsured coverage will help you pay for the excess costs that surpass the negligent party’s policy.

5 Potential Reasons for Insurance Premium Increases

California forbids insurance companies from increasing rates after making an uninsured/underinsured motorist claim. Proposition 103 legally binds companies against raising their customer’s rates.

However, there is an exemption, the same proposition does not allow you to make multiple UM/UIM claims in short periods — it can be seen as using your coverage to take advantage of either insurance companies or other drivers.

The only way insurance rates may go up in California after a UM/UIM insurance claim is if the insurance company raises your “risk status” as a driver. The factors that affect this rating are:

1. Your Age

Being too young or too old is a factor that counts towards your risk status, as it can equate to the driving experience. It is normal for a 22-year-old to pay a higher premium than a 50-year-old. The same applies to being too old. After a certain age, your insurance rates may be more expensive. On average, by 55, you’ll pay the least for an insurance premium, but as you approach 65, the cost begins to rise. 

2. Driving History

Perhaps the most important factor is your history, which gives insurance companies one of the best ways to assess your risk as a motorist. If you are a careful and defensive driver, this will be the least of your worries since you are bound to have a clean history. But if your record is riddled with accidents, speeding tickets, citations, and so on, your insurance rate is bound to rise as you would be considered a bad driver.

3. Type of Vehicle

This is also an important factor that affects your insurance quote as the insurance companies will use statistics to assess things like the involvement of certain vehicles in accidents, rate of theft, crimes committed in a certain vehicle, repair or replacement parts, the products or services needed to have your car repaired, and so on.

4. Parking Location

As ridiculous as it sounds, this is also a factor in your driving record. Leaving your car overnight in a public parking lot or on the street of a risky area puts it more at risk of theft or being wrecked than leaving it in the garage or parked in front of your house in a residential area.

5. Usage Patterns

Average mileage and use also vary from person to person. This also comes into play when calculating your insurance rate. Higher mileage and frequent use can also affect your premiums.

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So, Will My Insurance Premium Increase If I Make a UM/ UIM Claim?

No. Making a UM/UIM claim typically does not result in an immediate premium increase. However, frequent claims could affect your risk status, potentially leading to higher premiums over time. It is best to speak with your insurance provider to understand the specific impact on your policy.

Protect Your Rights!

Insurance companies may use dirty tactics to avoid paying you rightful compensation after an accident. They might even threaten to raise your monthly premium, even when it’s against the law, for the sole purpose of dismissing your personal injury claim.

A personal injury lawyer will help you go through all of this and will protect you from these predatory practices. At Farahi Law Firm, it is our goal to protect the rights of our clients against insurance companies. With us by your side, you’ll get the medical treatment you need and win the money you deserve for the medical costs of your accident injuries.

Need Assistance? We Can Help.

If you or someone you know gets in a vehicular accident with uninsured underinsured motorist coverage, know that you don’t have to go through it alone. We are here to help you!

Farahi Law Firm will take care of all your needs after an accident. From accident-related vehicle damage, medical care, hospital bills, and ongoing expenses, you name it. Call us today at (844) 824-2955 for a free consultation. 

We offer a no-fee guarantee, meaning you don’t have to pay anything until we win your case!

If you found this article helpful, please share it with someone who might benefit from this information. Your support can make a difference!

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