Rates for Uninsured or Underinsured Motorist Coverage
Worrying about insurance rate hikes after an accident is normal. Insurance agents and adjusters will try to dissuade you from the service you rightfully are 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 to save insurance companies money and to 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 that wasn’t at fault for an accident makes a claim. Be it an uninsured drivers/underinsured drivers claim or any other coverage you might have.
There are some caveats of course, and while making use of your insurance will not make your rates go up, there are some things that will. Although if you are a responsible driver you don’t have to worry about these, they are still good to keep in mind.
We will establish for you how and why you should use your UM/UIM coverage when it is needed and how your insurance rates may still go up under certain circumstances below.
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Why you need UM/UIM coverage and when to use it
Some adjusters or insurance salespeople will tell you that UM/UIM isn’t worth the hassle, or that you don’t need it. But, this coverage could make an immense difference for your claim.
Let’s say you get t-boned at an intersection, sure the at-fault driver’s insurance will help you cover your damage, but lo and behold, the other guy’s policy liability policy limits are the bare minimum required by the state, or worse, he isn’t insured at all.
Without protection from the uninsured or underinsured, you would have to pay for the damages out of your own pocket, and this would put a serious setback on your finances since you would have to get medical treatment and property damage repairs by yourself.
Although California requires people to have insurance, the National Association of Insurance Commissioners (NAIC) found out that about 13% of all motorists in the US do not have insurance for their vehicles. In simple terms, 1 out of eight drivers is uninsured motorists.
To protect yourself from an event where the other party consists of drivers without insurance you should get Uninsured Motorist Bodily Injury Coverage. Without it, unless you successfully sue the other party, every cost of the accident would come out of your wallet. With UM coverage, you’ll be compensated even if the other party cannot pay for it.
The same applies with Uninsured Motorist Property Damage Coverage, perhaps the damages to your car, lost wages, and medical expenses go beyond the at-fault party’s liability coverage limit UIM coverage will help you pay for the excess costs that surpass the responsible one’s policy.
Reasons Insurance Premiums May Rise after UM/UIM coverage
As we said before, 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, as 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 someone who is 50 years 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 you seldom would have to worry about it since you are bound to have a clean history. But if your history is riddled with accidents, speeding tickets, citations, and so on, your insurance rate is bound to go higher as you would be considered a bad driver.
- Type of Vehicle: This is also an important factor as 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, as leaving your car overnight in a public parking lot or on the street of a shady 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 and it also comes into play when calculating your insurance rate.
After a claim, or when you are acquiring your coverage, insurance companies would 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 in California it is against the law to penalize an individual for rightfully using their insurance coverage, these rate hikes might appear when renovating your policy or changing insurance plans.
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Don’t let insurance companies trick you. Call us for help!
As we said before insurance companies will use all the dirty tactics they can to not pay your rightful compensation after an accident, going so far as to threaten you to raise your insurance premiums even when in California it’s against the law for the sole purpose of dismissing your personal injury claim.
A personal injury will help you go through all of this and will protect you from these predatory practices. Our attorneys are trained to fight against insurance companies for your rights. With us by your side, you’ll get the medical treatment you need and win the money you deserve after an accident.
If you or someone you know gets in a vehicular accident with an uninsured or underinsured motorist, 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. Property damage, medical treatment, and bills, 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!