Why Auto Insurance Rates Rise After Many No Fault Accidents
One of the last things most people think about when purchasing a vehicle is auto insurance. But since every state requires every driver to obtain and carry auto insurance, it is an important thing to have. Those who don't think about obtaining auto insurance rates before deciding on a vehicle to purchase may find out that the car is actually worth a lot more than they previously considered. Sports cars tend to have higher auto insurance rates as do other vehicles, so even if you think you're catching a break on the price of the car, the overall costs can be high. Once you have insurance, you have to worry about keeping your premiums down and at a reasonable level. If you've had several accidents in a row, even if they're not your fault, your premium may still rise. Too many no fault accidents have the same effect on your rates that few at-fault accidents. It's important to know why this is the case.
No fault accidents are those in which either the other driver was at fault and negligent in an accident, or it could also be a natural disaster that damages your vehicle or the like. If you hit a pole or mailbox and no damage was done to the other object but there was damage to your vehicle, this can sometimes be counted as a no fault accident. Typically, however, a no fault accident means that you had no fault in the accident and it happened from outside forces.
Although you may have not caused the accident, the fact the accident occurred is bad enough for the insurance company because they have to pay out a claim. Insurance companies base their monthly rates on the chances of having to pay out a claim, which is why they ask for a bunch of past driving and personal history. The higher the chances are of your car being damaged, the higher your rates are going to be. If you have a bunch of no fault accidents, especially within a couple of years, you become a high risk for the insurance company. Whether or not the accidents were your fault takes a backseat to the fact that you attract accidents and the likelihood of you getting into another one is fairly high. This means more claim payouts for the insurance company and ultimately a higher rate for you.
Although you can try to avoid accidents, they occur anyway. Too many accidents, whether they were your fault or not, make you a high risk to your insurance company and they then raise your rates. The rate hike is to compensate for the likelihood of a payout.