Car insurance question, why do our premiums go up if it is not our fault ?

Question

I am 56 and am not used to being penalized if someone runs into me !! It was not my fault, I was sitting still at the stop light but it is on my insurance record, why, and when and how did this change ?

Answer 1

When the insurance companies realised they could charge people more money through clever definitions of what a claim or accident was, and rigging the possible answers in their favour.

For example, the question "have you had any accidents in the last three years (even if they weren't your fault)?" and similar acts as a catch-all, so you get noted as having an accident even if it was the other person's fault, and you didn't make a claim.

Isn't it wonderful what happens when people who make profit depending on the results get to choose how the statistics work?

Answer 2

According to the insurance companies (I got my answer from Geico and Farmer's) you're rates go up because you failed to avoid the accident, even though it wasn't your fault. They feel if you had had full time and attention on driving you would have known what was going on all around you and therefore, could have avoided the accident. It's basically a roundabout reason for insurance companies to charge you more money. That's the reason most people don't report accidents when they're not at fault AND the other person has insurance.

Answer 3

It's all because of the 'law of large numbers'. Underwriting uses thousands and thousands of computer models to get customers the lowest rates relative to the bizillion parameters built into the calculation programs. When you are involved in an accident, the model for your situation changes -- and most times so does your rates. Have no fear, the underwriting model changes all the time so you will probably be back to 'normal' within two years.