A question we often get here at Loeschen Law Firm is if the client should file a claim with their auto insurance company after an accident. The main concern when filing a claim is they do not want their insurance rate to increase. If the accident is not your fault, sometimes it seems easier to recover damages from the other driver’s insurance coverage and not file a claim under your own. However, not filing a claim with your auto insurance company is not a good idea. Insurance is there for when you need it.
Of course, the nature of the beast is that insurance companies exist to make a profit for corporate shareholders. Their officers and directors are paid high salaries to keep the profit machine churning. So, it stands to reason that expensive accidents and moving violations will more than likely result in an increase in your auto insurance rate. It’s important in these situations to understand how your insurance rate is decided.
Your insurance rate is based on several factors that determine your risk for an accident. Speeding is one of the many indicators that a driver is at greater risk for an accident. An expensive accident means that more money is going out to pay claims than is being paid in shareholder profits. More money going out means the insurance rate will increase. The corporate officers are not going to take a pay cut just because you had an accident. The insurance company will tell you that your driving history will follow you until you can be considered a “safe driver” again. The truth is that when the increase in your insurance rate is proportional to the statistical probability that you will have an accident, as indicated by your driver profile, then your insurance rate will decrease.
Loeschen Law Firm encourages you to drive safely and not to speed. Obviously being a safer driver will help prevent an accident. Unfortunately, accidents do happen. Sometimes it does not matter how safely you drive. Accidents can happen for a variety of reasons out of your control, such as how often you drive and traffic flow. If you are involved in an auto accident, we are here to help. The fact that you were in an accident, or unlucky enough to get a speeding ticket, does not necessarily mean you are an unsafe driver. Insurance companies profit on your risk. So, of course they will title you unsafe given the opportunity to increase your insurance rate.
The best way to get the best insurance rate is to shop around every year. It is easy to go year after year with the same company and settle for the insurance rate they have given you. However, keep in mind that insurance companies want to compete with rates. Compare your given insurance rate with a variety of companies with different types of coverage. You may save money with another insurance carrier. You may also be surprised at how much leverage you will gain with your current insurance carrier when you have a competing insurance rate bid. If your insurance company believes they will lose you as a customer, they may not raise your insurance rate after all.