Auto insurance premiums can be expensive nationwide but, according to Forbes, Texans spend an average of $1,009 a year on auto insurance. Texas law requires drivers to carry auto insurance for two reasons: to protect your assets and to pay for vehicle damages and bodily injuries when accidents occur.
While the Texas Automobile Insurance Plan Association (TAIPA)’s recently approved 4.8% hike in auto rates takes effect March 1, 2021, and impacts our wallets even more, every driver wonders, “ Will my insurance premium go up if I file an accident claim?”
The short answer is yes.
In today’s article, the Corpus Christi personal injury attorneys at The Burkett Law Firm explain why car insurance costs increase after an accident, and what you can do to keep your premiums low.
How insurance companies decide premiums
Auto insurance companies like USAA, Allstate, State Farm, and Geico use a process called underwriting to decide premiums. Insurance premiums are determined by a number of factors that are considered during the underwriting process:
- Driving record
- Vehicle type
- Choice of coverages
- Age
- Credit score
- Miles driven
- Where you live
While each insurance company has a different set of underwriting processes, Texas law requires insurance companies to charge fair rates to policyholders.
Factors that affect insurance rates after a car accident
We all know that car insurance costs tend to go up after an accident. The question everyone wants to know is: by how much?
Before discussing the factors and how much money is on the line, it’s important to note that most insurance premium rate increases last three to five years, but this varies from insurer to insurer.
Make sure you find out how long you could be paying more for your insurance by contacting your insurance agent.
Three primary factors that come into play when it comes to re-evaluating your insurance rates after a car accident include: fault, driving record, and claim history.
Factor 1: Who caused the accident?
Texas is an at-fault state. Meaning, the blame has to be placed on someone for the accident. If you’re at fault for the collision, your insurance company will pay for the damages for the other driver.
Afterwards, you can certainly expect to pay as much as 40% more in premiums. In fact, Insure reports that Texans can expect to see a 36% insurance rate increase after one at-fault injury accident.
Having a clean driving record is important as a Texas driver.
Even though Texas no longer participates in the Driver Responsibility Program, any other fines, fees, or suspensions on your driving record will still majorly contribute to the auto insurance rate increase after your accident.
The Texas Department of Insurance states that most insurance companies use the Comprehensive Loss Underwriting Exchange (CLUE) report to learn about the claims history of people for the past seven years.
The CLUE report shows claim history, dates of damage, type of claim, and the amount paid by the insurer.
If you’re interested in reviewing your claim history, Corpus Christi residents can get a free copy of their auto claims report each year through LexisNexis. Also contact LexisNexis to report incorrect information.
Ways to keep insurance premiums down
Unfortunately, there’s nothing you can do about how a car accident impacts your insurance rates. But what you can do is take measures to decrease how much you pay in the future:
- Practice safe driving habits
- Ask about discounts for antilock brakes and anti-theft security systems
- Consider paying a higher deductible each month
- Improve your credit score
If you’re considering doing away with auto insurance to avoid paying a higher premium after a car accident, don’t do it. Driving without insurance in Texas comes with steep consequences, including a traffic ticket up to $350.
If you’re involved in an accident and don’t have insurance, you may also find yourself served with a personal injury lawsuit with no option but to pay out-of-pocket.
Not having insurance can be used against you as a sign of negligence, even if the other driver causes the accident.
At this rate, the compensation you were seeking for your car accident can be reduced, and when you finally decide to get insurance, your rates can increase once you apply for insurance coverage.
Contact a Corpus Christi personal injury attorney
If you were injured in a car crash in or around Corpus Christi or the State of Texas, you should contact a personal injury attorney as soon as time permits. The sooner you seek quality legal representation, the sooner you can pick up the pieces of your life and get back to a place of normalcy.
The Corpus Christi personal injury lawyers at The Burkett Law Firm can help you get the financial compensation you deserve after a Texas auto collision. We’ll even consider your premium increase when calculating damages and fighting for your rights. Call us now for a free consultation at 361-882-8822.
