Does Your Insurance Go Up After a Claim That Is Not Your Fault?

Your insurance may go up after a claim that is not your fault, depending on the type of claim you’re filing. If your claim involves a car accident, insurance companies sometimes view drivers involved in crashes as higher-risk, regardless of fault. 

However, how much your rates increase—or if they increase at all—can also vary based on your insurer’s specific policies. You should review your insurance contract and talk to a legal professional if you’re concerned about a potential rate hike.

If you are concerned about recent increases, our Raleigh bad faith lawyers can review the details of your policy and the rate increases and advise you on your next steps during a free consultation.

Why Do Insurance Companies Raise Their Rates After a Claim?

Insurance companies raise rates after a claim based on their assessment of risk. Even if you are not at fault for the accident, your involvement might signal to the insurer that you’re more likely to file another claim in the future.

Factors that could lead to a rate increase include the severity of an accident, the cost of the claim, and the type of coverage involved. By understanding the reasoning behind rate increases, you can better challenge unfair rate hikes.

How Different Types of Insurance Claims Can Affect Your Rates

As noted, the type of insurance claim you file can play a major role in whether your rates increase, even if you weren’t at fault for the accident. Below are common types of claims and how they could affect your insurance rates in North Carolina:

• Liability claims: If the accident is your fault and you file a liability claim, your insurance rates are more likely to go up.
• Comprehensive claims: These are typically for non-accident-related incidents, like theft or weather damage. Depending on your insurer, filing a comprehensive claim may not result in a rate increase.
• Uninsured/underinsured motorist claims: If a driver without the right amount of insurance hit you, filing this type of claim may not impact your rates, as you were not at fault.
• Collision claims: Even if you’re not at fault, a collision claim could lead to higher rates depending on your insurance company’s policies.

Each insurer has its own rules, so reviewing your policy or consulting with an attorney who manages insurance claim cases can help you understand how a specific claim might affect your rates.

Can I Challenge an Insurance Rate Increase?

When an insurance company raises your rates, you may feel like you have nowhere to turn. However, you can challenge the increase. In North Carolina, insurance companies must follow specific regulations, and they should base rate hikes on legitimate reasons. 

If your rates increase after a claim that wasn’t your fault, you can take the following steps to dispute the change:

• Review your policy: Check your policy’s terms to ensure the rate increase aligns with what’s outlined in your agreement.
• Ask for an explanation: Contact your insurance company and request a detailed explanation for the increase. Sometimes, mistakes can be made, and simply asking for clarification could help resolve the issue.
• File a complaint: If you feel the explanation is unsatisfactory, you can file a complaint with the North Carolina Department of Insurance. This agency regulates insurance companies and confirms that they comply with state laws.
• Consult our insurance lawyers: If the issue persists, we can help you understand your rights, negotiate with your insurer, or take legal action if necessary. We can also confirm if a rate increase is fair and in compliance with state regulations.

Taking these steps can help you address any concerns and potentially reverse an unfair rate hike.

When to Get Legal Help If Your Insurance Rates Are Too High

If you believe your rate increase was unjustified, knowing when to reach out for legal help is important. Our insurance attorneys can step in if:

• Your insurance company will not provide a clear explanation for the rate hike.
• The insurer is not following North Carolina’s insurance regulations.
• You suspect the insurance company is acting in bad faith by improperly increasing your rates after a claim.

How Our Insurance Lawyers Can Challenge a Rate Increase

If you are facing an unexpected or unfair insurance rate increase after filing a claim, our experienced attorneys will take steps to protect your rights. When we meet with you, we can:

Review Your Policy

The lawyer will carefully examine your insurance policy to determine whether the rate increase violates any terms or conditions. They will look for any language regarding rate increases and ensure the insurer is acting within the bounds of your contract.

Look Into the Rate Increase

Our lawyers can request a detailed explanation from the insurance company regarding the reasons behind the rate hike. Understanding the insurer’s rationale can help us determine if the increase was unfair or a result of bad faith practices.

Negotiate With the Insurance Company

If the rate increase is found to be unjustified, we can negotiate directly with the insurance company to resolve the issue. They may be able to lower the rate, restore your previous premium, or reach a settlement that benefits you.

File a Complaint With the State Insurance Department

If negotiations are unsuccessful, we can help you file a formal complaint with the North Carolina Department of Insurance. This step ensures the insurer is held accountable for any violations of state regulations.

Take Legal Action on Your Behalf

In cases where the insurance company continues to act in bad faith, we may advise pursuing a lawsuit. We will represent your interests in court so that we can reverse the rate increase and potentially recover damages if a court determines the insurer’s actions were illegal.

Is an Unfair Rate Increase Considered Bad Faith?

For a rate increase to be classified as bad faith, the insurer must have acted unreasonably, such as by:

• Raising rates without a valid reason or in violation of North Carolina insurance laws.
• Failing to explain the reasons behind the increase when asked.
• Applying the increase in a way that contradicts the terms of your policy.

If an insurer engages in these behaviors, it could be grounds for a bad faith claim. We know how to prove bad faith insurance and can explain how to sue an insurance company for bad faith tactics, so we can advise you further during a free consultation.

How to Avoid a Rate Hike After Filing an Insurance Claim

While avoiding every rate increase isn’t possible, you can take steps to lower the chances of a premium hike after filing a claim, such as:

• Shop around for policies: After a claim, it may be beneficial to compare insurance providers to find one that offers a better rate or more favorable terms.
• Consider paying out of pocket: For minor accidents, paying for repairs out of pocket may prevent your rates from increasing.
• Increase your deductible: Opting to pay a higher deductible can help lower your premiums, although this means you’ll pay more if an accident occurs.

Did Your Insurer Raise Your Rate After a Claim That Wasn’t Your Fault? Call Us

If your insurance rates have gone up after a claim that was no fault of yours, we can advise you on whether you can challenge and how to go about doing so. At Whitley Law Firm, our experienced insurance lawyers can review your policy, negotiate with your insurer, and take legal action if you were treated unfairly. 

Call us today for a free consultation and learn how we can help you navigate this frustrating situation. Don’t let your insurance company raise your rates without a valid reason—we generally return calls within 24 hours; reach out to us today to explore your options.