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Drivers see higher premiums after not-at-fault crashes

  • ASSOCIATED PRESS

    A car involved in a Feb. 2016 accident sat in the road Virginia. The Consumer Federation of America says it found premium hikes in some cases reaching $400. It looked at premium quotes in 10 cities from five of the nation’s largest auto insurers and found that Progressive aggressively used a not-at-fault penalty, surcharging drivers in eight of the ten cities.

WASHINGTON >> Most drivers don’t expect to be hit with a rate hike on their auto insurance after a car accident that wasn’t their fault. But a consumer group says it happens, and it’s a problem.

The Washington-based Consumer Federation of America says it found rate hikes on annual premiums as high as $400, in some cases.

In the report released today, the group analyzed premium quotes in 10 cities, including New York and Chicago, from five of the nation’s largest auto insurers. The researchers found that Progressive aggressively used a not-at-fault penalty, surcharging drivers in eight of the 10 selected cities. Rates in Oklahoma City and Los Angeles did not change. Oklahoma and California prohibit not-at-fault penalties.

The group said GEICO and Farmers raised rates in some states by 10 percent or more. Allstate had occasional penalties. State Farm was the exception, with no increases in premiums for not-at-fault accidents.

“Most people know that if they cause an accident or get a ticket they could face a premium increase, but they don’t expect to be punished if a reckless driver careens into them,” said Bob Hunter, CFA’s director of insurance and the former insurance commissioner of Texas.

The industry countered that setting auto insurance rates is complicated and insurers look at many factors, such as a person’s driving record, where the driver lives, the kind of car insured and the number of miles on it. Some insurers may consider not-at-fault accidents, according to industry officials, but not all do.

The National Association of Mutual Insurance Companies says there could be other reasons for the rising premiums that CFA found. But, “the report itself only underscores the fact that insurance rates can vary widely from company to company, based on how different companies may weigh the many different factors that are considered in determining rates,” said Neil Alldredge, the association’s senior vice president for state and policy affairs.

Among the cities tested, drivers in New York City and Baltimore paid out the most for doing nothing wrong, the consumer group said. In Baltimore, premiums increased more than $250 and in New York City, it was about $400. In Chicago and Kansas City, the average increase was about $100.

The federation’s report found that people with moderate incomes often saw bigger premium increases than upper-income people. That seemed to mirror average premiums in the report even for people with clean driving records and no accidents, with middle-income people generally seeing higher premium rates than those people with bigger incomes.

The consumer group called the five biggest auto insurers and asked for quotes for two 30-year-old female drivers, living at the same address in the different cities, licensed for 14 years and driving a 2006 Toyota Camry with 10,000 miles. One woman had a master’s degree and was a homeowner. The other woman had a high school diploma and rented her home.

The report found drivers with higher incomes, on average, paid $78 more after a no-fault accident. Moderate-incomes drivers paid $208 more after an accident in which they were not to blame.

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      • no matta. we goin hav car going driv itself pretty soon eh, so who cares. tink of it as donation to the soon out of biz auto insurance companies. mahalo to uber an lyft guys.

        • More people die from human error than computer errors. I think I would trust my life more in autopilot than some average person driving at 3am because they’re sleepy, drunk, tired, etc.

        • Bill Gates once quipped that if he would have been a car engineer they’d be cheaper. Automotive engineers responded that if he did, we’d all have to stop every couple of days and reboot them.

    • I was with State Farm for quite a few years. I thought I was paying too much for my cars so I decided to shop around. I found another company that I would be paying a lot less. ($700+ to $370) I was mad so I cancelled my policy with State Farm & took the other companies policy. Then State Farm quoted me a new price of 400+. You know what I told them. I will never deal with State Farm again.

    • Island insurance is awful. If you get into an accident with someone with Island Insurance good luck. It takes forever for them to get in touch with their own insured…

    • One reason State Farms rates are low is because they pay less in legal damages. SF fights all cases even if they’re wrong. I was warned of this for my case. I was nearly killed in a rear ended by large SUV. Debilitating injuries put me out of business. After a ridiculous offer I was awarded a reasonable settlement in arbitration. SF’s attorney said that he was instructed to appeal the case to the state Supreme Court. The cost of bringing expert witnesses (such as Doctors etc.) would have cost me $20,000 per trial. If I lost on appeal I would have had to eat the costs. State Farm is using their corporate might and legal backing to force lone individuals to submit to their overwhelming corporate legal power. Bully tactics is how they keep premiums down.

    • Island Insurance is the most crooked insurance company around. After one of their insured drives damaged my property, in order to get paid, they required me to have an affidavit signed by me and get it notarized all at my expense.. bastards…

  • Get into an accident… not your fault. Remember Hawaii is NO FAULT… Say it cost $2000 to fix your car… Well, guess what, over the next 3 years the insurance company raised their rates just enough to get their $2000 back. Is it an insurance company or a loan agency?

    • One of the great legal ponzy entities that can never lose. If you are a bad driver you pay, if you are a good driver you pay, if you make any claim they say sorry we are forced to increase your premiums.

    • Well…”No Fault” doesn’t mean it’s nobody’s fault. No Fault has to do with injuries sustained from an accident. The medical bills for any passengers are covered without any haggling between insurance companies. As far as rates go, I’ve had the same insurer for 40 years and my rates have never gone up, even after a few not-my-fault accidents.

    • That was really not what the “no fault” was initiated for. It was to protect those who drive on our road legally to ensure all drivers/vehicles have insurance. Obviously, there are people that do not have it and there lies the issue.

  • The insurance industry needs to be investigated. Obviously, they are screwing the driving public. It appears they get you coming and going.
    If you are at fault, they raise your rates, and if you are not at fault, they raise your rates.

  • Do what 40-million illegals on the mainland already do. legally change your name to Jesus Perdo Rodriguez then buy a junker in that name and if you or someone else also without insurance wreaks it, your max loss is the cost of the junker. You too can give the middle finger to your auto insurance company and then have the “D”onkey party swoop in to the rescue as they only pander to illegals with Hispanic last names.

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