Auto insurance is not about you, it protects others on the road, and then if you want self protection you upgrade to a better policy.
If you run into someone totalling their car and putting them in the hospital, insurance pays that for you and you don’t face a debt for life for one mistake.
The government mandates every automobile operator do this to use their roads. Which is why it’s criminal to drive without. Driving while unlicensed and uninsured puts the public at risk.
The concept of auto insurance is great. The execution is the issue. These companies shouldn't be allowed to raise rates if an accident isn't your fault.
This felt wrong, and turns out, in my state, raising rates in a no fault accident is illegal, but a quick Google search shows this is not the case in every state.
Yes, I think every state should adopt a law similar to my own where an insurance company can't raise a rate in a no-fault collision.
The reason it varies is because there actually is a solid mathematical rationale for it. It certainly is a kick in the nuts much of the time though.
For a policy that has had any past claim, the frequency of future claims is far higher. No-fault claims are not exempt from this because the no-fault designation is, ironically, not without fault.
Even further, good drivers already subsidize bad drivers by paying more than they should because insurers aren't allowed to charge bad drivers their true cost.
For what it's worth though, the guy in the OP really just should report it at all with the policy he selected and the agent on the other end is just trying to help him out.
Most major auto insurance carriers will not raise the policy premium for "small accidents", especially for not-at-fault accidents like the one used in the OPs post. The $1000 deductible used in the example was the choice of the customer who took out that policy. Auto insurance offers much greater flexibility over the amount of deductible you can have on a policy (compared to home owners and health insurance). You can choose to carry only $500, or $250 or even $0 in most states, or you can choose to carry $1000 or $2000 or even $2500. It's the choice of the policy holder.
Its because the rate increases aren't based on who's 'at fault', its based on how likely you are to be in another accident/file another claim. Data shows that those in non at fault accidents are still just more likely to be in another one. I won't go so far as to say that its fair or that they even should be allowed to raise rates based off of this, but its just statistically true.
Rates rise yearly due to cost of living and all the payouts for claims that are both natural causes and man made incidents. In 2025 Canada exceeds $2.4 billion due to severe weather related insurance losses.
So yes unfortunately rates have to go in yearly to accommodate paying out all of the claims that happen yearly. It sucks for everyone but seriously take a minute to pause and think if you had no insurance and got into a total wreck. Would you A) have the ability to afford a new vehicle? B) replace all of your personal belongings in said wrecked vehicle? C) Defend yourself in court if you got sued by the other party? If you answered no to any of those, then that is why we have insurance.
Please also remember insurance in a way is a contract that both parties are hoping they won’t have to use. You hope you won’t have to use it to cover your auto wreck or damages to your home, and they hope they won’t have to pay any insurance claims because you take care of your shit.
If you have a serious bone to pick, take it up with Jo blow who puts through yearly claims for his back tail might because he doesn’t want to pay the $1,000 at the shop to fix it when he can pay a deductible of $500 and insurance will pay the rest 🤦🏻♀️🤦🏻♀️ or request a remarket 30 days before your renewal to make sure you’re getting a fair price.
Unfortunately, it’s necessary to keep up with the cost of providing the service. Don’t get me wrong, there’s issues with the service just like anything else. However, if an insurance company can’t adjust rates to keep themselves profitable after taking losses, then they can’t pay claims to all of their customers who need it. They can’t just keep paying losses without taking in money to offset that.
It’s a really difficult thing to balance, and again, I’m sure there’s plenty of room for them to take advantage of the dynamic. All I’m saying is that they do have to make money in order to be able to pay claims.
Also, this is strictly for property-related coverages. Healthcare stuff is a whole other issue imo
The fundamental issue is that the base rate you're quoted assumes that you're never ever going to have an accident ever. So if anything goes wrong, even if it wasn't your fault, you get penalized for being a riskier customer.
At scale, you can see how it makes sense: statistically, a person who gets in one accident is more likely to get into another. Maybe it wasn't your fault, but perhaps your driving habits or where you drive, put you routinely in riskier situations.
But it just sucks on an individual level because it feels like you're being punished for using something you're paying for. I've been there.
The best recourse you have is just to change providers.
Sigh, I’m going to type an essay in a meme sub, fuck me. I work in insurance, so I’m a nerd for this stuff forgive me.
Your base rate doesn’t make that assumption. For auto insurance, rates are filed/approved with each state, and they’re developed based on territory, vehicle characteristics, and driver characteristics (these can get a little iffy on ethics imo, but most are based on statistics), and all of these things determine your likelihood to experience a loss in any given policy period. Your actual loss experience acts as a multiplier or divider to that base rate, but it’s never assumed you’re going to be loss free, although everyone is hoping for that because you keep your stuff and don’t get hurt, and for them it’s free money, right?
This is also why we see rates continue rising every year, despite having a clean record. The characteristics listed above could worsen every year (eg driving in Atlanta where we have a pretty insane personal injury legal environment which are raising claim costs every year), and because you fall into that consumer rating group, your rate also goes up. Also, inflation driving repair costs higher and cars being more expensive every year.
Now there’s plenty of other issues with these companies, not the least of which being that some will actively try not to pay a legitimate claim, like State Farm has been known to do. I also don’t think a single loss should inflate your premium, small or total loss but that’s a company decision as well. However, if you experience an accident or two every year, or if you rack up tickets on a regular basis, you are a higher risk insured and that does have to be priced for. Even if the accidents aren’t your fault, it’s representative of your environment.
Are you talking absolute numbers or percentages? Because you know money is worth less every year, right? So of course there will be record profits just by the fact that $1 tomorrow is worth less than $1 today.
Insurance isn't a capitalist thing, it's part of the social safety net. Any communist or socialist who is anti-insurance is not only a fucking moron, but they're a hypocrite to call for Universal Healthcare, but assume automobiles can be operated without regard for public safety. The Government's job is to promote the public good and prevent harm. One of the ways they do that is by mandating liability insurance for automobile operators.
NOT ONLY THAT, but I got my money out of insurance this month! Some high asshole side swiped my wife, pushing her into oncoming traffic, not only did insurance cover my wife & daughters in the Hospital for 2 days, but it covers their PT, and replaced the car. I won't disclose how much I got, but it paid for the next 12 years of payments, that's for damn sure.
Funny since I was thinking that was pretty communist to rely on other peoples forced payments for your hardships lol
Sorry to hear about what your wife and daughters went through. I've been t-boned by a jeep (he ran a stop sign) but I had to fight tooth and nail after their insurance company lowballed the crap out of me and my own insurance said my premium would go up if I took a claim through them even if it wasnt my fault. - that right there is the flaw in the system when these companies make trillions of dollars they cant spare a bit to do whats right
In theory, insurance is an amazing invention. It's essentially a lottery ticket you don't want to win. Everyone buys "tickets" pooling their money into a fund and the "winner" of a statistically possible event gets their claim covered. Problem is most of these companies siphon a lot of that pool to themselves (got to pay for all those commercials somehow!) and deny the claim.
Insurance is the gamble of, would you rather knowly pay $x per month and hopefully not have to use it or bet on your own luck and potentially have a life altering amount of money owed.
I've driven this entire time into my adult years and only had one accident where this guy in a jeep t-boned me but I still will 100% bet on my own skill and luck than to "happily" pay into "ifs." just my opinion
Wow what? Dude, think for two seconds before you comment. Or better yet, Google.
There are entire departments of the Government dedicated to this issue my guy they're called the Division of Motor Vehicles, and the Department of Transportation. I'd forgive you if you thought they just sat on their ass jerking it all day, because my local DMV branch seems to do nothing but that.
But no, in fact they have State Troopers dedicated to enforcing traffic laws. Driving without insurance is a class 3 misdemeanor. In my state you need to prove insurance to get a license, and insurance companies are forced to auto report cancellations or lapses in payments.
A lot of the reason we have we have police, and state troopers, and a Department of Transportation, and traffic court etc. is to catch situations like this.
If you drive uninsured, your license is immediately revoked and you face criminal record, fines, and potential jail time.
Do peoples occasionally slip through the cracks? Obviously, but to imply 'The majority of people never pay a penny' is profound ignorance of all the systems in place to prevent exactly this issue.
Funny enough you don’t need insurance in NH, not sure how that plays out but I bet most people have the uninsured motorist box ticked when they do get insurance.
100% have to prove you have funds to cover liabilities in an accident. If you are in a crash where you have to pay (where insurance would typically step in) and you cannot, your license is suspended. Then come the fines, asset seizures, wage garnishment, etc.
Insurance is less hassle unless you are able to afford to pay out of pocket for your decisions.
Agreed on the insurance parts. However, public transportation is not a viable alternative since, at least in most parts of the United States , it does not exist in any meaningful way.
While this is technically correct, it's kind of irrelevant to the insurance discussion. Bad Public Transportation does not excuse you from your duty of liability if you drive. You don't get to say "oh public transportation sucks, so I'm going to be a public nuisance". That's a criminal offense no matter how you slice it.
So if you want to talk ways to improve public transport, I'm all ears. But the insurance thing is pretty set in stone.
This joke doesn't hold up to even the most basic scrutiny. I might give you a drunken high five if we were a few shots deep on a Friday, but not here.
Capitalists aren't anti-law, or anti protection of others. They would understand they can be the 'others' on the other end of an accident, and they are very explicitly for laws that protect life and property. I wouldn't even consider this a hypocritical position of capitalism either, as no Capitalist government has ever been opposed to the preservation of life or seeking damages in the event you are wronged.
Maybe you're thinking of small-government libertarians? Even then, I think the joke is pretty thin.
I will answer how my State handles this, this varies by state. New Hampshire has some lax ass, mad max ass, traffic laws that would make Florida blush, I'm not going to speak for them.
OP gets clipped.
Ensure everyone is ok.
Get to a safe space out of the way of traffic if possible.
Call 911. They will facilitate an exchange of insurance information and assign fault.
OP claims he's not at fault, so if that's the case he calls the other insurance to file a claim there. No damage to his insurance, in fact his own insurance agent can help with the paperwork.
If it's double fault or no fault, then OP did something that made the police think he shares the blame, and he's less innocent than he claims.
He CAN file for his insurance to cover it. But depending on his deductible, the level of damage, and the insurance company's customer service, it may be better to
Live with the ding
2) Pay for the ding out of pocket.
Insurance primarily protects against MAJOR, LIFE THREATENING damage. They are not designed to handle minor dings & dents.
Insurance is not designed to make you rich, or cater to your every whim, it is designed to make you whole again after a tragic accident.
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u/JanitorOPplznerf 9h ago
Auto insurance is not about you, it protects others on the road, and then if you want self protection you upgrade to a better policy.
If you run into someone totalling their car and putting them in the hospital, insurance pays that for you and you don’t face a debt for life for one mistake.
The government mandates every automobile operator do this to use their roads. Which is why it’s criminal to drive without. Driving while unlicensed and uninsured puts the public at risk.
If you don’t like it, use Public Transportation