Sign up for one of our email newsletters.
Updated 45 minutes ago
WASHINGTON — Most drivers don't expect to be hit with a rate hike on their auto insurance after a car accident that wasn't their fault. But a consumer group says it happens, and it's a problem.
The Washington-based Consumer Federation of America says it found rate hikes on annual premiums as high as $400 in some cases.
In the report released this month, the group analyzed premium quotes in 10 cities, including New York and Chicago, from five of the nation's largest auto insurers. The researchers found that Progressive aggressively used a not-at-fault penalty, surcharging drivers in eight of the 10 selected cities. Rates in Oklahoma City and Los Angeles did not change. Oklahoma and California prohibit not-at-fault penalties.
The group said GEICO and Farmers raised rates in some states by 10 percent or more. Allstate had occasional penalties. State Farm was the exception, with no increases on premiums for not-at-fault accidents.
“Most people know that if they cause an accident or get a ticket, they could face a premium increase, but they don't expect to be punished if a reckless driver careens into them,” said Bob Hunter, CFA's director of insurance and the former insurance commissioner of Texas.
In response, the Insurance Information Institute said the underwriting of a new auto insurance policy requires the collection of much more information beyond what CFA gathered from the auto insurers' websites.
Loretta Worters, vice president of communications at the industry trade group, says it also is rarely clear-cut as to who the at-fault party is after a collision. But she said one reason rates may rise for the not-at-fault driver is subrogation — when an insurer, after paying a loss, seeks to recover money from the at-fault driver's insurer.
Neil Alldredge, a senior vice president at the National Association of Mutual Insurance Companies, says the report “only underscores the fact that insurance rates can vary widely from company to company, based on how different companies may weigh the many different factors that are considered in determining rates.”
Our editors found this article on this site using Google and regenerated it for our readers.
