Does Your Car Insurance Carrier Penalize You When You Were Not At Fault?

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The Consumer Federation of America recently released new research that shows that safe drivers often see car insurance increases when they are involved in accidents  caused by other drivers.

car_insuranceAccording to the news release, in this new trend, some insurance carriers are penalizing their own customers when their customer did nothing wrong. It used to be that if you were involved in a collision that was not your fault, your own insurance company would not raise your rates. Makes perfect sense. Why should you be penalized when you did nothing wrong?

However, recently, a number of insurance companies decided to increase their profits by hitting their customers with significantly increased premiums when they had the misfortune to be involved in a crash that was not their fault. Two of the biggest New York carriers, Progressive and GEICO, were among the worst offenders of this new policy.

imagesInnocent drivers who don’t cause accidents should not be charged more because someone else hit them, J. Robert Hunter, CFA’s director of insurance and the former insurance commissioner of Texas, said in the news release. “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.”

CFA urged lawmakers around the country to prohibit penalties on innocent drivers. “Penalizing safe drivers hit by another car is not only very unfair; it also discourages them from filing legitimate claims,” Hunter said. “Lawmakers and regulators need to protect consumers from being punished when they’ve done nothing more than use the policy they have already paid for.”

CFA compared two good drivers – the only differences reflected in their socio-economic circumstances rather than their driving records – and found the following:

  • Higher-income drivers paid $78 more on average after a not-at-fault accident.
  • Moderate-income drivers paid $208 more on average after a not-at-fault accident.
  • Higher-income drivers faced a 6.6% penalty on average after a not-at-fault accident.
  • Moderate-income drivers faced a 9.6% penalty on average after a not-at-fault accident.
  • Excluding State Farm customers, who were never penalized, the average surcharges jumped to $99 (8.3%) for higher-income drivers and $264 (12.1%) for moderate-income drivers.

My suggestion: Contact your insurance agent and ask if your carrier has a policy of increasing premiums in not-at-fault crashes?

If so, I recommend you contact other insurance carriers as there are many carriers who do not increase premiums in this situation.

Thanks for reading,

Jim

___________________________________

James B. Reed
NY & PA Injury & Malpractice Lawyer
Ziff Law Firm, LLP
Office: (607)733-8866
Toll-Free: 800-ZIFFLAW (943-3529)
Blogs: NYInjuryLawBlog.com and
            NYBikeAccidentBlog.com

 


Report: Insurance Companies Cheat Many Consumers With ‘Lowball’ Claims Payments!

Download the new report about how insurance giants are "lowballing" accident claim payments.

The Consumer Federation of America issued a new report this month that says the nation’s largest insurance companies use computerized claims systems that can be easily “adjusted” to make “lowball” claim payments to many injured consumers, resulting in payments that are smaller than consumers are entitled to according to their insurance policies!

The primary author of the report is a former longtime insurance executive and an expert on insurance claims’ practices.

This is just another example of the big insurance companies robbing the very people who pay their hard-earned money to have coverage when they need it!

You can read the full report here.

Mark Romano, the Claims Project Director for the Consumer Federation of America, said he hopes the report will be a “wake-up call for consumers and regulators” about Colossus, the dominant claims systems in the marketplace, which is sold by Computer Sciences Corp.

“When CSC and its competitors talk publicly about computer-based claims systems, they stress that the programs allow insurers to more consistently evaluate bodily injury claims,” Romano told the Consumer Federation of America. “Consistency is a legitimate goal, but these companies tell a different story behind closed doors. Software marketing representatives acknowledge that the real reason insurance companies are willing to invest millions in these systems is that they can dial down claims payments to thousands of consumers at a time, regardless of whether these payouts are fair.”

According to the federation, the report also identifies specific techniques that insurers can use to directly and indirectly produce “lowball” claims:

  • Directly reduce payments by a predetermined amount across the board, without determining whether this will lead to unjustifiably low payments for individual claims.
  • Selectively remove higher-cost claims from data used to determine the acceptable range of payments for particular injuries. This has the effect of lowering payments for all claims of this type.
  • Require insurance adjusters without medical training or credentials to second-guess medical professionals by altering injury determinations, thus dictating lower payments for certain injuries.
  • Encourage adjusters to downplay or even ignore the likelihood that injured consumers will need future medical treatment or will be permanently impaired, thus lowering payouts.
  • Encourage adjusters to determine that drivers are partly at fault for the auto accident that injured them, even when they may not be.

All drivers should download a copy of the report and keep it handy in case they ever have an accident. Know your insurance policy and your rights. Read your policy and be vigilant if you ever have an accident.  Educated consumers may be the best defense against these despicable practices!

For drivers in Elmira, Corning and the Twin Tiers — thanks for reading, and stay safe!

Thanks, Jim

_________________________________
James B. Reed
NY & PA Injury & Malpractice Lawyer
Ziff Law Firm, LLP
Office: (607)733-8866
Toll-Free: 800-ZIFFLAW (943-3529)
Blogs: NYInjuryLawBlog.com and
            NYBikeAccidentBlog.com