What Do Insurance Carriers Consider An Accident For Purposes Of Setting Rates?

Motor vehicle accidents may substantially affect those drivers and passengers who are unfortunately involved in them. When they occur, personal injury, including physical and emotional harm, and property damage are results of an accident that must be addressed by an experienced personal injury attorney. Another is an accident’s effect on the insurance rates of the drivers. What do insurance carries consider an “accident” for purposes of increasing driver’s rates?

Car insurance companies typically define an “accident” by designating the threshold amount of a claim as well as the threshold of driver fault. Generally, if the degree of fault in an accident is less than 50%, an insurance company will not consider it in setting a policyholder’s payment rate, unless it is a new applicant. Of course, proving fault in an accident is a difficult endeavor that typically requires the hard work of experienced personal injury attorneys and expert witnesses. Thus, for many carriers, a chargeable accident is one in which a policyholder is deemed more than 50% at fault.

State Farm defines it as a claim “totaling $750 or more under property damage liability coverage and collision coverage combined.” GEICO refers to them as “qualifying accidents,” but has a claim amount threshold of $500. State Farm and GEICO both require that the accident be at least 50% of the driver’s fault.

Allstate also uses a threshold of $500 and 50% fault but defines a chargeable accident based on whether premiums are being calculated for returning or new customers. The latter are more strictly treated with an accident defined as any incident that results in damage to property, bodily injury, or death.

Progressive and Farmers also define an “accident” as something that results in injury, damage, or death, and will consider prior accidents in establishing rates for a new customer unless such customer was faultless (0%). Progressive requires less than 51% fault for renewing customers, while Farmers requires claims that are less than $400.

The task of determining what is not an “accident” for insurance purposes may be more complex than defining what is an accident. While most insurance carriers do not provide explicit information about what is not within the definition of an accident, State Farm does. According to State Farm, “an accident shall not be considered at-fault or chargeable if the applicant demonstrates:”

  • The accident was caused by contact with birds, animals, missiles, or falling objects;
  • The policyholder was lawfully parked;
  • The policyholder was reimbursed by, or on behalf of, a person responsible for the accident or has a judgment against such person;
  • The policyholder was struck in the rear by another vehicle and has not been convicted of a moving traffic violation in connection with the accident;
  • The policyholder was hit by a “hit-and-run” driver and the accident was reported to the proper authorities within 24 hours; and
  • The policyholder was not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile involved in the accident was convicted of a moving traffic violation.

All companies consider whether an accident is qualifying based on a time frame, usually, the three years preceding the policy’s start date. Thus, an accident that occurred five or six years ago will not be considered when the rate of insurance is calculated. Some companies have accident forgiveness programs which will waive, usually one, qualifying accident.

Since 1906, Powell Law has met the needs of those who require representation in the Scranton/Wilkes-Barre area. Powell Law’s attorneys have unmatched experience assisting individuals who have suffered damages caused by the negligent conduct of others. With Powell Law’s experience, we have the unique ability to help our clients through any type of personal injury case. Contact Powell Law at (570) 961-0777 or visit us online. Call now for a FREE case evaluation. You don’t pay unless we win!

What Do Insurance Carriers Consider An Accident For Purposes Of Setting Rates?

Request a Free Consultation

Contact Us