February 27, 2011

Why No Fault Accidents May Still Mean An Increase In Auto Insurance Premiums

If someone has an auto insurance policy, they naturally look for ways to not have increased auto insurance premiums. Usually this means that they try to deter traffic infractions or are proactive in avoiding collisions. Most insured drivers understand that defensive driving will lower the chances of accidents occurring. If an accident does occur, it is more likely that it will be the fault of the other driver. This normally leads most to believe that this will not result in a rate increase on the auto insurance policy because the fault does not lie on them. Surprisingly, no fault accidents may still mean increased auto insurance premiums, even if that driver did all that they could to avoid the collision.

The first thing to realize is that insurance companies set the rate of the auto insurance policy based on factors that will affect the risk. If someone has already had a traffic infraction or another collision on record, and then has another no fault collision, it demonstrates a pattern. Even if the most recent incident was not the fault of the driver, it might caused increased auto insurance premiums because it demonstrates to the insurance underwriter a predisposition to collisions. It is important to realize that rates of an auto insurance policy are based on statistics and not personal evaluations.

Another reason that an auto insurance policy might increase in not at fault collisions is if the insurance company of the one not at fault had to pay the claim. This has been known to occur quite often in uninsured or uninsured motorists cases. Although this might prove to be costly, it is worth the extra investment because there are so many people on the roads driving with little or no insurance coverage. Technically, the insured person might not be at fault, but the collision still resulted in damages having to be paid by the insurance provider. This makes little difference in case of fault defined in monetary terms because it is still a loss to the insurance provider. Satisfied drivers consider uninsured or under insured coverage as an investment in protection, as opposed to an expense, which will inevitably be used in the driving career of most people.

Insurance providers issue an auto insurance policy based on its own individual company terms and conditions. These policies might fluctuate in coverage requirements and tradition, so it is important to read the details of each unique policy. Increased auto insurance premiums do not necessarily mean a company is overcharging, but probably just compensating for certain risk assessment fluctuation. It is important to examine personal policies at regular intervals to guarantee that the best coverage at the best price is being maintained.