Insurance Rates After At-Fault and No-Fault Accidents

We've all heard the story: Someone is stopped at a light, doing nothing wrong. And suddenly someone comes speeding into them and causes an accident. The speeder is at fault. This we know. What we don't understand is why the innocent party saw their auto insurance rates go up the next year.

There are many things about the insurance industry that remain a mystery but this scenario could be one of the most frustrating. That's because we put such an emotional price on the fault vs. no-fault concept of auto accidents, and forget that there are dozens of factors that go into creating a car insurance premium.

In actuality, the person's insurance premiums went up likely for reasons other than the accident itself: perhaps this wasn't the person's first fender-bender (fault or no-fault). Maybe the person was driving on a high-risk road. Maybe the person lives in a high-risk ZIP code. And maybe the cost of living went up, which means insurance rates are going to go up as well.

What you can do

If you are in an accident, and it's not your fault, there are some things you can do to keep your insurance costs the same, or at least protect yourself for the future These tips can help you think about your options:

• Prepare in advance: Some insurance companies offer programs called "accident forgiveness," in which you are basically granted a reprieve if you're in an accident. You'll need to meet certain requirements to quality for these programs. Usually you'll need to have a stellar driving record. But a program like this could protect you in the event of a no-fault accident.
• Change your route: Insurance companies keep track of how far you commute to work, and the accident rates in your ZIP code. If you live near an area that's prone to auto accidents (and you know if you do), avoid that intersection or area. If you stay off that segment of road or highway, you're statistically less likely to be in an accident.
• Talk about it: Don't like your insurance rates? Annoyed they went up after a no-fault accident? Then call and complain. Talk to an agent, discuss the situation with your insurance company, and see if you can work something out. You might be surprised.
• Change your insurance carrier: Having trouble with your insurance company? Getting penalized for accidents that weren't your fault? Then fight back, and change companies. You can easily get competitive online auto insurance quotes today, which means you can do a cost-analysis and comparison of several different insurance companies at once. Get quotes, compare them, and see if you can enjoy some savings on your insurance costs.