Yes, Car Insurance Companies Ream You After an Accident

If you think insurance companies ream you after a car accident, you're right.

It's a head-scratcher: You pay, what, a hundred bucks and change each month for auto coverage, basically for nothing, and the minute you get in a collision you pay again.

In fact, California is the worst state in the nation for post-accident premium increases, according to a new report from website insuranceQuotes and data partner Quadrant Information Services.

The average premium increase after a claim in which you're at fault is a nation-leading 78 percent in the Golden State, the report found.

“We set out to answer these questions, 'How much do auto insurance premiums go up after just one $2,000 claim, and which states see the biggest rate hikes in 2016,'” an insuranceQuotes spokeswoman told us. “California drivers see a whopping 78 percent increase in their rates after one claim — the highest rate increase in the country.”

For an average auto insurance customer in the Golden State, that would amount to an additional $614 a year, the report says.

Massachusetts (66.7 percent), Wisconsin (53.5 percent), North Carolina (52.7 percent) and Iowa (47.3) round out the top five states with the largest post-claim increases.

The national average premium increase is 44 percent, or $370 a year based on typical coverage, the report said.

Analysts looked at coverage for a 45-year-old married woman who is employed, has good credit, has had no lapse in coverage and has filed no prior claims.

The figures include bodily injury, property damage and comprehensive coverage claims.

The report suggests that 1998's voter-approved Proposition 103, which banned some factors used by insurance companies to determine rates, including credit scores, might have backfired on California drivers.

“California insurance companies must base insurance premiums on three primary factors: driving safety record, average miles driven per year and years of driving experience,” the report says.

“It’s getting more and more expensive to file a claim,” says J. Robert Hunter, director of insurance at the Consumer Federation of America. “There are many reasons for this, like more drivers on the road and the number of accidents on the rise.” 

Be careful out there.

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