A report released this week by the Consumer Federation of America found several cases of huge increases in insurance premiums for customers involved in car wrecks that were not their fault.
“Innocent drivers who don’t cause accidents should not be charged more because someone else hit them. 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,” stated J. Robert Hunter, the Director of Insurance and the former Insurance Commissioner of Texas. Hunter has called on state lawmakers to get rid of such penalties, claiming that “penalizing safe drivers hit by another car is not only very unfair; it also discourages them from filing legitimate claims.”
The report looked at insurance premium quotes in 10 cities throughout the US: New York City, Baltimore, Chicago, Kansas City, Atlanta, Jersey City, Jacksonville, Minneapolis, Oklahoma City, and Los Angeles. It looked at quotes from five of the top auto insurers in the US, for each city: Progressive, GEICO, Farmers, Allstate, and State Farm.
Researchers found that Progressive Insurance penalized not-at-fault drivers the most, with average increases of 16.6% in every city except for Oklahoma City and Los Angeles (both Oklahoma and California disallow premium penalties for not-at-fault drivers). Meanwhile, GEICO raised their rates by an average of 14.1% in 8 of the 10 applicable states, while Farmers increased theirs 11.1%. Allstate applied penalties occasionally (4.8% average increase), while State Farm showed no increases for those found to be not at fault for their accidents.
When looking at the actual penalties, there were drastic differences in each city. New Yorkers paid out the most in penalties, showing an average increase in premiums of about $400. Baltimore premiums went up over $250, whereas those penalized in Chicago and Kansas City saw an average increase of $100.
There were also differences in penalties when compared to income. Not-at-fault drivers with moderate income paid an average of $208 more in premiums, whereas those with a higher income paid an average of $78 more after an accident.
For more information, and the original report, please visit http://consumerfed.org/press_release/major-insurance-companies-raise-premiums-not-fault-accidents/