Insurance Rates in Uninsured Underinsured Motorist Coverage

uninsuredu 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 that your insurance rate will go up.

This is not done with your best interests in mind but, instead, to save insurance companies money and avoid the complexities of the legal process during a personal injury or car accident claim.

Thankfully, in California, it is illegal to raise insurance rates after an individual — who wasn’t at fault for an accident — makes a claim, regardless of having uninsured/underinsured (UM/UIM) drivers policy or any other car insurance types.

There are some caveats, of course, and while using your insurance benefit will not increase your rates, there are some things that will. If you are a responsible driver, you won’t have to worry about these, but they are still good to keep in mind.

This article discusses how and why you should use your uninsured underinsured motorist coverage, when it is needed, and how your insurance rates may still go up under certain circumstances.

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

Some insurance adjusters or agents might tell you that uninsured motorist insurance and underinsured motorist insurance isn’t worth the hassle, or that you don’t need it. But this additional coverage could make an immense difference on your claim.

Let’s say you get T-boned at an intersection. Surely the at-fault driver’s auto insurance policy will provide collision coverage for property damage. But, unfortunately, the responsible party’s policy liability offers only the minimum insurance limits required by the state, or worse, he isn’t insured at all.

Without protection from the underinsured or uninsured driver, you would likely have to pay for the damage expenses and additional expenses out of your own pocket. This could pose a serious setback to your finances since you will have to pay for medical bills and vehicle repairs without financial assistance.

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 where 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.

Reasons Insurance Premiums May Rise After UM/UIM Coverage

California forbids insurance companies to increase rates after making an uninsured/underinsured motorists 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:

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. By 75, motorists pay on average $2,087.

Driving History

Perhaps the most important factor, your history 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.

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.

Where You Park Your Vehicle At Night

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.

How Your Car Is Used

Average mileage and use also vary from person to person. This also comes into play when calculating your insurance rate.

After filing a claim, or when acquiring your coverage, insurance companies will input this information into a mathematical formula and charge premiums depending on the risk factors.

Although some of these factors might raise your insurance rate after an uninsured motorist claim, they won’t raise them by much. Because it is against the law in California to penalize an individual for rightfully using their insurance coverage, these rate hikes might appear when renovating your policy or changing insurance plans.

Don’t Let Insurance Companies Trick You, Call Us For Help!

Insurance companies will use all the dirty tactics at their disposal to avoid paying you rightful compensation after an accident. They might go so far as to threaten you 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.

If you or someone you know gets in a vehicular accident with an 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!

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