When it comes to auto insurance, most people looking for policies consider the premium, type of coverage they want, and the reputation of the company for paying claims in a timely manner. What they don’t think about is the actuarial science and calculations that go into determining premium amount, coverage, and what claims get paid.
For all that insurance companies may promise to their policyholders, most of them are chasing profits rather than making sure that your auto insurance claims are fully paid.
Insurance companies employ teams of actuaries and underwriters who build and use formulas and reports when making decisions about whether to insure and how much to charge. They have access to information that may include your credit report, driving record, claim history, vehicle mileage and registration, etc.
Some of these factors are among those used in calculating your insurance FICO score, and in assigning your car an ISO number based on the make, model, safety ratings and past performance. Negative ISO and insurance FICO scores mean that the insurance company has determined that insuring you or your vehicle is somewhat more risky, and your policy will cost more.
Cost to Renew Your Insurance
The insurance FICO score and vehicle ISO are generally not released to you. They are just used for the insurance company’s purposes. Another piece of information that you generally do not have access to is whether submitting an insurance claim or getting a traffic ticket will raise your insurance premium when it comes time to renew — or if it will get your insurance policy cancelled or not renewed. Your insurance premium may increase if you are in an accident even if it was not your fault.
Depending on the type of claim you submit, and how many you submit during a certain time period, a claim may trigger an increase in the premium when you renew, or cancellation or non-renewal of your policy. This varies among insurance companies, but, for example, your rates may go up if you make a bodily injury claim instead of just a property claim.
If Your Policy Doesn’t Cover Everything
If damages in your accident, for example, from bodily injury – either yours or that of the other or others involved – exceed the amount provided for in the collision coverage policy for you or the other driver, or if the insurance company refuses to pay, there may be options for recovering the remaining amount.
You may bring a bad faith claim against the insurance company if coverage is not provided up to the prescribed amount under certain circumstances, or you may be able to sue other defendants directly if the insurance amount does not fully cover your injuries. If the party at fault has umbrella insurance coverage, you may be able to pursue a claim against the other insurance companies or policies involved in the umbrella coverage.
North Carolina is an at-fault state that looks at pure contributory negligence in an accident. That means that the driver who is at fault must have their insurance pay for the other driver’s injuries and property damage, but if the other driver was also somewhat to blame, they are not entitled to a payout. If you were not at fault, a good attorney can help build your case and prove that you do not share blame and are entitled to compensation for damages.
Insurance companies manage risk and claims in order to maximize profits, so it should come as no surprise if an insurance company denies your claim or if your insurance company raises your rates, issues a surcharge, or cancels or denies renewal of your policy after an accident — even if you were not at fault. A good accident lawyer can help you where an insurance company may not — to recover the compensation you need to pay for your damages.