Your auto insurance premium is likely to rise after an accident even if you were not at fault. A study, conducted by the Consumer Federation of America, found that if a driver had just one accident in which another driver was at fault, Allstate, Farmers, Geico and Progressive all give quotes for annual premiums that are higher by an average of $176 (10%). Among the five major auto insurers studied in 10 big US cities, only State Farm does not penalize innocent drivers.
Insurance companies claim it’s difficult to determine whether a driver is truly blameless in many not-at-fault accident situations. Also, drivers who have been in any past accidents are considered more likely to have accidents and to file insurance claims in the future.
According to the study, Progressive is the most aggressive at penalizing drivers with not-at-fault accidents, quoting rates that are an average of 16.6% higher, followed by Geico at 14% higher and Farmers at 11% higher. Allstate’s rates are an average of 4.8% higher.
The study was conducted by submitting applications for two 30-year-old female drivers that were identical except for a single detail: One had a not-at-fault accident on her driving record, the other did not. The difference in annual premium quotes between the two drivers varied widely from city to city, ranging from an extra $60 in Atlanta to $401 in Queens, New York. Baltimore ranked second (an extra $258) and Minneapolis third (an extra $213). The study also found that the higher the socio-economic background based on factors such as education and home ownership, the lower the quoted rate differences for not-at-fault accidents.
The state you live in also plays a factor. In California and Oklahoma, consumer laws prohibit such premium hikes. And some states define not-at-fault accidents differently and provide partial protection from rate increases. For example, Massachusetts allows premium hikes for an accident only if you are more than 50% at fault and the claim amount is more than $500 after you pay your deductible.