Many people who are involved in auto accidents fear that their auto insurance premiums will increase. This fear causes some motorists to avoid reporting their collisions to their insurance companies to try to avoid insurance rate hikes. However, if you were not principally at fault for causing your collision, you won’t have to worry about insurance increases. Arizona prohibits insurance companies from increasing the premiums of their insureds based on collisions for which they were primarily responsible. By contrast, however, you can expect your insurance premiums to go up if you were principally at fault. Here is some information about insurance rates after accident claims from the attorneys at Lamber Goodnow.
Arizona Insurance Laws and Rate Hikes Following Accidents
While some states restrict the rating factors insurance companies can consider when determining premiums, Arizona does not. Arizona insurers can consider all of the following auto insurance rating factors when setting rates:
- Sex
- Age
- Experience with driving
- Credit
- Education
- Employment status
- Occupation
- Insurance history
- Residential address
- Driving record
- Marital status
- Residential status[1]
While the underwriting process is complex and considers numerous factors, your driving record can have an outsized impact on your premiums. For example, one speeding conviction can increase your auto insurance premiums in Arizona by as much as 29%.[2] In general, insurance companies count moving violations, including speeding, failing to obey traffic control devices, failing to yield, and other similar traffic convictions against you. If you have multiple moving violations in the three years before your policy will be issued, they can affect your insurance premium rates. An insurance company might also count multiple dismissals of traffic violations against you.
Some types of traffic violations will have a greater impact on your insurance rates than others. For example, if you have a conviction on your record within the past 10 years for a DUI, extreme DUI, or aggravated DUI, it can cause your rates to initially skyrocket and remain high for years.[3, 4, 5] This is because while most insurance companies look back for three to five years for traffic violations, some look back further for major traffic offenses.
Another major factor insurance companies consider when looking at your driving record is whether you have been involved in accidents. However, under A.R.S. § 20-263, insurance companies in Arizona are specifically prohibited from increasing your premium rates following an accident in which you were not at fault or did not significantly contribute to the accident’s cause.[6] If your insurance premiums are increased because of your accident, your insurance company must also provide you with written notice of the reason for your increase. Insurance companies that violate this law are subject to a $300 penalty and must reimburse insureds who have had their rates increased following no-fault accidents.
While it is important for you to always exercise reasonable caution whenever you drive to avoid violating the traffic laws and potential accidents, the state’s laws make it clear that your insurance company should not increase your rates based on a car accident unless you are determined to be at fault or your actions are determined to have significantly contributed to the collision. However, your rates can go up when you were at fault or significantly contributed to the cause of your accident.
Anticipating Rate Increases Following an Accident
After a collision that was your fault, the accident will cause your insurance premiums to skyrocket. Nationally, the average increase in insurance premiums following an accident is 49%. However, Arizona drivers can expect their insurance rates to go up by more than the national average. In Arizona, drivers who have one at-fault accident see average premium increases of 54% for an average annual dollar increase of $353.[7] For example, if your monthly premium before your collision was $100, and you were more than 51% at fault, you can expect your monthly premium to increase to $154 per month or higher. If you file a second at-fault accident claim, you can expect your rates to increase even more.
Fortunately, your insurance rates won’t remain high forever after making an accident claim when you were at fault. Your insurance rates will generally be affected from three to five years before returning to the lower rates you previously enjoyed. You should see a gradual decrease in your insurance premiums during the three to five years as long as you avoid more at-fault collisions and traffic violations.
Determining Fault and UM/UIM Claims
Arizona is a fault state for auto accidents. This means that you will file a claim with the at-fault driver’s insurer to recover compensation for your injuries, property damage, and other losses. The at-fault driver’s insurance company will be responsible for paying your damages. However, you might file a claim with your own insurance company if the other motorist was uninsured or underinsured under your UM/UIM coverage.
UM/UIM coverage is an optional coverage that you can purchase at the time you buy your policy. Under A.R.S. 20-259.01, our insurer must offer this type of coverage to you, but you can decide against purchasing it.[8] However, it is a good idea for you to purchase a UM/UIM policy on your auto insurance policy. This insurance covers you when you are involved in an accident caused by an uninsured motorist, and it will also make up the difference in your losses if the other motorist’s policy is insufficient to cover your damages.
Many Arizona motorists fail to get insurance despite the state’s minimum liability requirements. Others only purchase coverage meeting the minimum requirements. If you are seriously injured in a collision, the policy limits for an at-fault driver who only carries insurance meeting the minimum liability requirements might be insufficient to cover your losses. In this scenario, you could file a claim with your UM/UIM policy to make up for the difference.
When you file a claim, the insurance company will investigate to determine who was at fault. Your attorney will likewise investigate your claim to make a fault determination. Even if you believe the other motorist was clearly at fault, the company might instead try to dispute liability and blame you. Your lawyer at Lamber Goodnow can help to investigate your claim and gather evidence to prove to the insurance company that the other motorist was primarily at fault and help you to pursue damages.
Your insurance company cannot consider accidents for which you were not at fault when setting your premium rates. Instead, it can only raise your rates if you were found to be at fault or to have significantly contributed to your collision’s cause. Your insurer should not use your claim against the at-fault motorist or your UM/UIM policy against you when setting your rates.
Comparative Negligence and Car Accidents
Under A.R.S. § 12-2505, Arizona follows a comparative negligence system for auto collisions.[9] Under this approach, the state recognizes that both motorists are sometimes at fault for an accident. If you were partially at fault for your collision, it won’t prevent you from recovering compensation for your losses. However, your damages will be reduced you your percentage of fault. For example, if you were found to be 40% at fault and were awarded $100,000, your gross award would be reduced by 40% for a net recovery of $60,000.
In terms of insurance rates, however, your premiums should only be increased if you are determined to have significantly contributed to your accident. Your attorney can help you understand what might be considered to be a significant contribution of fault to your accident. If your degree of fault is less than that, your rates should not be increased based on your collision.
If your case goes to trial, a jury would determine the percentage of fault held by both you and the other involved party. How a jury allocates fault is based on the evidence that is presented at trial. By contrast, if you reach a settlement agreement, you and the other involved party will reach an agreement about who was at fault and the percentage held by each of you.
You should anticipate that insurance adjusters will comb over the evidence, including your statements, the other motorist’s statements, the police report, and witness statements. Insurance companies typically dispute fault following an accident except in cases in which the facts are clear. Part of negotiating your settlement will include how fault should be allocated.
Admitting Fault in a Settlement Agreement and the Impact on Your Rates
The vast majority of car accident claims are settled before trial through settlement agreements. If your claim settles, you will waive your right to pursue a lawsuit against the at-fault motorist for the collision in exchange for the agreed-on compensation. While a settlement agreement normally is in the interests of all of the involved parties, you should make sure that your agreement does not provide that you were at fault or significantly contributed to the cause of your collision. If it does, your insurance rates can be increased. Make sure to carefully review a proposed settlement agreement to ensure your rights are protected.
Frequently Asked Questions
Here are some of the most frequently asked questions the attorneys at Lamber Goodnow receive about auto insurance rate increases following accidents.
Q: How Much Will My Insurance Premiums Increase After an At-Fault Accident?
A: The average increase in insurance premiums following at-fault accidents in the U.S. is 49%. However, the increase varies based on the state. In Arizona, drivers who are involved in one at-fault accident can expect average premium increases of 54%.[10] The increase you might expect will also depend on your insurance company and whether you qualify for an accident forgiveness program your insurer might offer.
Q: Can I Get Auto Insurance After an At-Fault Accident?
A: You should be able to purchase auto insurance after being found at fault for an accident. However, depending on the severity of the crash and your culpability, you might have to purchase alternative insurance for high-risk drivers. Major insurance companies might be unwilling to underwrite a policy for you. You should expect to pay high premiums for alternative high-risk auto insurance.
Q: Will My Premiums Increase if I File an Auto Accident Claim?
A: If you have comprehensive and collision coverage, you can file an auto accident claim to pay for the cost of repairs to your vehicle following a collision in which you were at fault. However, your insurance company will increase your rates if you do. If your repair costs are close to your deductible, it might make sense to pay for the repairs out-of-pocket instead of filing a claim with your insurer to avoid a rate increase.
Q: How Long Will an Auto Accident Claim Affect My Insurance Rates?
A: If you are at fault in an auto accident, you can anticipate that your claim will affect your insurance rates for three to five years. Your rates will be recalculated when it’s time to renew your policy, and you can expect the highest rates during the first year following your accident. They should return to close to normal by year four, but you might not see a return to your previous rates until five years have passed since your collision. If your accident resulted in serious bodily injury or because of drunk driving, your insurance company will likely penalize you for longer than if your claim involved a minor fender bender with no injuries.
Q: Will My Insurance Rates Increase After an Accident in Which I Wasn’t at Fault?
A: While some states do not restrict insurance companies from increasing auto insurance premiums following collisions in which their insureds were not at fault, Arizona prohibits insurance companies from doing so. Under A.R.S. § 20-263, auto insurers operating in Arizona are prohibited from increasing their insureds’ premiums following collisions for which their insureds were not at fault.[11] This means that your premiums should not go up after an accident in which you were not at fault.
Insurance Rates After Accident and Why You Should Speak to an Attorney
If you are worried about your insurance rates after an accident, remember that Arizona prohibits insurance companies from increasing auto insurance premiums for people who are not at fault for causing their accidents. Unless you significantly contributed to the cause of your accident or were at fault, filing your claim should have no impact on your auto insurance premiums. This is also true if you file a UM/UIM claim with your insurer when the other motorist was underinsured or uninsured. If you were not at fault, were seriously injured, and suffered property damage, you should consider filing a claim. Contact an experienced auto accident attorney at Lamber Goodnow for a free consultation to learn more about your rights.
References
[1] https://www.thezebra.com/resources/research/car-insurance-rating-factors-by-state/
[2] https://wallethub.com/answers/ci/check-driving-record-arizona-2140755146/
[3] A.R.S. § 12-1381.
[4] A.R.S. § 12-1382.
[5] A.R.S. § 12-1383.
[6] A.R.S. § 20-263.
[7] https://wallethub.com/edu/ci/how-much-does-insurance-go-up-after-an-accident/87986
[8] A.R.S. § 20-259.01.
[9] A.R.S. § 12-2505.
[10] https://wallethub.com/edu/ci/how-much-does-insurance-go-up-after-an-accident/87986
[11] A.R.S. § 20-263.