Auto Insurance Premiums Continue to Rise in US and Accidents Are Main Culprit

Jan 22, 2021 6:53 PM ET

iCrowdNewswire   Jan 22, 2021  1:53 PM ET

There are various costs associated with running a vehicle, and one of the highest ones is often related to auto insurance. It is mandatory to have auto insurance in place if you drive your vehicle on the road, and there are different levels of coverage you can choose from. Some people pay a small fortune in insurance premiums, as they can vary based on factors such as your vehicle, the type and condition of the vehicle, the level of coverage you choose, and any past claims you have made. The excess you have can also impact insurance costs, as premiums can vary depending on the deductible.

In addition, insurance premiums can vary because of vehicle accidents, and this is one of the main culprits of significant increases according to experts. In fact, some people who make a claim following an accident that was their fault see their premiums shoot up by between 34 percent and 41 percent on average according to figures. This can equate to a huge amount in monetary terms and can put motorists under serious financial strain.

Furthermore, it is claimed that just one claim for an accident where you were at fault can have a huge impact on your insurance premiums. So, even if you have never made an auto insurance claim before and have a good driving history, that very first claim could see your premiums rocket. The amount of the increase can vary based on a range of factors, and this includes the state you live in. Some people could end up seeing premiums rise far more and far faster than others following insurance claims.

General Increases Due to Claims

Of course, you also have to keep in mind that even if you have not made a claim on your insurance personally, you could still see your premiums increase incrementally because of overall claims made to the insurance provider. If the insurance provider is hit with a lot of claims from drivers across the state, all customers of the company will see their premiums increase to help the insurance company to cover the cost of paying out on the claims.

On top of this, the cost of carrying out repairs and settling claims has risen over the year, as these costs increase due to inflation. This means that insurance companies have to pay out more to cover claims following accidents, and they therefore have to charge more across the board when it comes to insurance premiums for their customers. All of this can have a huge impact on the amount paid on insurance cover by each motorist that takes their cover through the insurance provider.

What Can Impact Your Premium Increase Following an At-Fault Accident?

There are various factors that can affect your premium increase when you make an insurance claim following an accident where you were at fault. Your location will have an impact on the amount by which your premium increases, as this is something that can vary from one state to another. The insurance company you are with will also have an effect on the amount you have to pay on your coverage following an at-fault accident. Your driving record will also affect the amount you have to pay on your premiums after an accident as will the value of the claim.

According to recent data, the state in which you live can have a significant impact on the amount by which your insurance premiums will rise following a claim. Among the states that have the highest increases following a single car accident claim are:

  • California – 63.1 percent
  • New Hampshire – 60.3 percent
  • Texas – 59.9 percent
  • Massachusetts – 57.3 percent
  • North Carolina – 57.3 percent

However, there are other states where the percentage by which insurance premiums increase following an at-fault accident claim are far lower. This includes:

  • Maryland – 21.5 percent
  • Michigan – 26.1 percent
  • Oklahoma – 27.9 percent
  • Montana – 30.2 percent
  • Kentucky – 30.6 percent

As you can see, the difference in premiums between different states is quite remarkable. It means that someone in Maryland, for example, will see their insurance premiums rise by far less than someone in California even if the circumstances of the accident are the same. It is thought that regulations in different states have a big impact on the level by which insurance premiums are bumped up following an accident. It is also thought that the number of accidents in each state can have an effect on the rate by which premiums are increased after an accident claim.

Keeping Your Insurance Premiums Down

Naturally, given the other costs associated with car ownership, most drivers are keen to find ways to being their premiums down. Fortunately, there are various ways in which you can achieve this goal. Some of the steps you can take in order to reduce your premiums are:

Increase Your Deductible

One of the things you can do in order to bring insurance premiums down is to increase your deductible. While it means paying more from your own pocket in the event of a claim, it does also mean that your regular premiums could be significantly lower.

Compare Insurance Providers

It is also important to ensure you compare insurance providers even withing your own state. The cost of cover can vary widely between providers, so you should take some time to look at the cost of cover from different ones.

Avoid Smaller Claims

You should also avoid smaller claims where possible, and if you can cover the cost of the issue yourself, do so. If your deductible is set at a higher level, you will probably find that you have to cover the cost of smaller claims yourself anyway.

Consider Level of Cover

Finally, consider the level of coverage you opt for, as comprehensive cover can be far more expensive than he most basic. So, based on your vehicle and needs, make sure you choose the right level of cover to help keep costs down.

These are some of the measures you can take to help reduce your premiums.