Many California drivers believe their insurance premiums will increase any time they file a car accident claim. However, insurance carriers are strictly regulated when it comes to how they can determine what premiums to charge. In 1988, the California Legislature passed Proposition 103, codified within Insurance Code section § 1861.02, which eliminated the purely free-market system that was being used to determine premium rates up until that point in time.
Factors for Determining Premiums
Since the passage of Prop 103, insurance carriers may only consider the following factors “in decreasing order of importance” when determining what premiums to charge:
The insured's driving safety record.
The number of miles he or she drives annually.
The number of years of driving experience the insured has had.
Those other factors that the commissioner may adopt by regulation and that have a substantial relationship to the risk of loss.
Driving Safety Record
Determining an insured’s “driving safety record” is a process that is closely regulated by statute. Essentially, two sub-factors are considered:
Moving violations in the past 36 months.
Being deemed “principally at fault” for a car accident.
According to the California Code of Regulations section 2632.13, “principally at-fault” for an accident means that the driver's is at least 51 percent of the legal cause of the accident and the accident resulted in either injury or more than $1,000 in property damage. The regulations go on to provide that a driver will be presumed not “principally at fault” in accidents where the driver’s vehicle was parked, rear-ended, where the damage was caused by a falling object, and where the accident was caused by a “hazardous condition” despite the use of reasonable care (i.e. black ice). However, the insurer can rebut this presumption with evidence of fault and declare their insured principally at fault (thereby subjecting the insured to a premium increase) where such evidence of fault exists.
Your insurance company is strictly regulated when it comes to raising premiums.
The main factor in determining your premium is your driving safety record, which is primarily based on moving violations and “principally at fault” accidents.
“Principally at fault” means 51% at fault or more for the accident.
You are presumed not “at fault” in a variety of scenarios as prescribed by regulation. These scenarios include accidents involving your parked car, rear-end accidents, and accidents due to falling objects. However, your insurance can still raise rates if they have evidence to rebut the presumption of no fault.
The bottom line is that if you've been in an accident that wasn't primarily your fault, you should probably consider filing a claim. Think of it this way: you wouldn't purchase rain boots and then decide not to wear them during a downpour. Choosing not to utilize the insurance coverage you've paid for is akin to that. Feel confident in filing a claim when necessary, knowing that your rates cannot be arbitrarily increased as a result.