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What Happens to my Auto Insurance Rates After an Accident?

Getting into a car accident can be an incredibly stressful event, often causing physical pain, and emotional and financial strain. It is stressful enough that when you get in a car accident, you often have to worry about medical expenses and fixing the damage to your vehicle. Add in the stress of rising insurance rates, and just thinking about the consequences of collision involvement can cause a headache.

Rising Premiums a Possibility

A new study found that drivers making just one claim to their insurance company end up stuck with a national average increase of 41% on their auto insurance premium. This study’s purpose was to answer the difficult question of whether insurance rates will rise for drivers after involvement in an accident. It is difficult to get a straight answer to this question, as insurance companies consider many factors that determine an insurance rate increase on an individual basis, including driving record, fault in the accident and the degree of severity of the accident. Bodily injury claims were found to be the most expensive for drivers involved in an accident.

The study found that, on average, drivers who make one single claim of $2,000 or more can expect their premiums to raise $335 per year, based on a national average premium of $815 annually (or a 41% increase, as previously mentioned). If a driver makes two claims in one year, that increase spikes to 91%. Making an insurance claim can affect your insurance premium for three to five years. If the accident was not your fault, your premium should not increase. However, in many states, a conviction for driving under the influence can remain on your driving record, and consequently is reflected in insurance premium charges. The amount of increase varies from state to state. In Georgia, the average insurance premium is $749 annually. After one accident claim, that premium increases an average of 31.4%.

The reason behind the rising premium after filing a claim is that insurance companies know that filing a claim for an accident makes it likely that someday you will file another. This, in turn, makes a customer more risky and expensive to insure. Robert Hartwig, president of the nonprofit Insurance Information Institute explained, “People shouldn’t view an increased premium as a penalty, but rather as an assessment of your risk moving forward. After making a claim, you’re now that much more likely to be involved in an accident in the future.”

Contact Goldstein & Hayes, P.C.

If you or your loved one has been involved in an auto accident and have questions, please do not hesitate to contact our Atlanta injury law firm. The experienced personal injury attorneys at Goldstein & Hayes, P.C. are dedicated to helping you with every step of your case, and assisting with handling insurance claims. Contact us today for a free consultation.