Was watching one of those commercials for car insurance. Person says that their friend’s rate got jacked up after a minor fender bender. I exclaim,“That’s how insurance works!” However, it occurs to me I could be mistaken. Which one of us is wrong about how insurance works?
Rates going up after a minor fender bender.
Depends on a variety of factors.
- driver age
- length of time as a customer
- other policies you have with carrier
- location of accident
- any laws broken
- past violations without an accident
- type of car you have
- age of car
etc, etc,
It’s a Liberty Mutual commercial, if that helps. But the pp seems ton say the person in the commercial doesn’t get insurance. I don’t drive, so that’s my excuse.
Yeah, there are a lot of things that go into rates. Sometimes they can increase statewide for everyone. Also, if you make a claim you may lose your claim free discount. Or it may entail how much your policy had to pay out. Or it may be because you were at-fault for the accident, etc, etc.
Rand: I believe it went up because she made a claim. This was the point of the commercial/rant.
To be clear about the situation, this is an argument you’re having w/ your television, correct?
Most of the big insurance companies have some sort of accident forgiveness thing now where a single minor accident won’t affect your rates if you’ve been a customer for a while. I’d guess that might be what the commercial was talking about.
My BIL used to get policies with really low deductibles, and he was constantly putting in claims. Surprise, surprise - they didn’t renew his policy. I hit a deer and we have a $1000 deductible. Our rate didn’t go up. I expect it might have been a different story if I’d hit a bus full of nuns and orphans.
FTR - we’re with GEICO and have been for over 5 but less than 10 years, and we’ve always had multiple vehicles on our policy.
Hitting a deer usually doesn’t affect your rates because it is processed as a comprehensive claim, not a collision one. Although if you live in an area infested with the hooved scourges, your comprehensive rates may already be relatively high to account for it, just like if you lived in a big car theft area.
I think I know the commercial in question (or at least a similar one) Someone describes rates going up after an accident and says something like " What’s the point of insurance if your rate goes up as soon as you use it?" I hate that commercial (although I don’t argue with my TV ) becasue the point of insurance is that you don’t have to pay for the damage if you get into an accident and that while the policy is in force you don’t have to worry about how you* would* pay for damages if you got into a an accident . And that’s true even if you company doesn’t offer accident forgiveness or if you are not eligible for accident forgiveness.
You’ve never yelled at your TV? :dubious: Thanks doreen! Like I said, I probably don’t understand insurance.
To simplify, your premium goes up, because once you make a claim, you’ve “proven” you’re a riskier customer.
NM. I know better.
My gf has State Farm. A few years back she was notified that due to her long history of safe driving with them, she was being “awarded” some special guaranteed level rate thing. Coincidentally, she almost immediately had an accident.
C’Mon Ambi, tell me what you REALLY think of me!
It doesn’t matter how much damage was caused. If you were at-fault for an accident, you get a flat surcharge on your policy for 3-5 years.* Typically in the neighborhood of 30%, but it varies by carrier. This will happen no matter how small the accident, *unless *you have accident forgiveness. Accident forgiveness is an optional coverage that can be granted after years of loyalty to one insurance company. I think some carriers might offer it from the outset, if you pay a higher premium when you take out the policy–but I’m not 100% sure of that.
So, whether you caused a $500 accident or a $50,000 accident, you pay the same surcharge. But the more damage you cause, the more likely it becomes that the insurance company will drop your policy.
*And even if you switch carriers, there’s a massive central claims database that they all pull from. You’ll be charged the extra 30% no matter which carrier you go with. You can’t lie and try to pretend the accident never happened to get away from it, either. Your policy would be dropped for material misrepresentation (one of the four elements of insurance fraud).
I never have. Although I have laughed at it a bunch especially watching Family Fued and some of the answers the people give.
I don’t know if it’s NJ law or just my insurance company’s policy, but our rates don’t get raised for an accident that’s not our fault.
The company we have is NJ Manufacturer’s. Over the many years that our family members have been with this company, we’ve had our share of claims, but they were under collision or comprehension coverage, or the accident was somebody else’s fault. We have not had our rates raised. Not once. Now, NJMI won’t take you on at all unless you have a clean record: no tickets or accidents for two or three years. And if you get too many moving violations, they won’t raise your rates, you just become ineligible for their coverage.
I switched 2 months ago to Allied/Nationwide for me and my 21-yr-old daughter. It’s $100/month cheaper than what I’d been paying at my lowest-rate insurance company. It includes forgiveness of 1 at-fault ticket and 1 at-fault accident, for each of us. I’m not paying a higher premium for it, and I’m a brand-new customer. I had been with the previous company for over 20 years, if that makes any difference. I use an insurance broker and make sure yearly that I’m still using the cheapest insurance company. Oddly enough, I was rear-ended at a pedestrian crossing barely a month into the new policy, my first accident in many years, and both my co and the other party’s co, State Farm, have been stellar at handling the claims so far.
Reminds me of many occasions where I had to deal with someone who had liability only. I’d put them not at fault, the other company did likewise for their insured, and I was closing down the claim. People would get mad at me. “What do I pay you for?!”
You pay me to keep you from getting sued from the other insurance company when you’re at fault.