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Consumer advocacy group looks at variance in auto insurance costs for not-at-fault drivers

The Consumer Federation of America, a national consumer advocacy group, recently published a report highlighting the fact that insurance costs associated with accidents can vary in sometimes significant and non-intuitive ways.

According to the report, most drivers in most states are probably paying more for car insurance when they get into accident through no fault of their own. The group looked at insurance quotes from the five top national auto insurers in 10 cities across the country. What they found was not only that drivers in some locations, such as New York City and Baltimore, are paying more for insurance despite having a good driving record, but also that drivers in some locations, such as Chicago and Kansas City, face significant average premium increases when they are struck by another driver. 

Different insurers have different approaches to handling no-fault accidents, of course, with respect to the extent of coverage, the ongoing costs of an accident, and the penalties associated with no-fault insurance coverage. One interesting finding is that the costs of not-at-fault automobile accidents may vary based on the income of the driver. Surprisingly, the report found, higher income drivers may pay less in some locations than moderate income drivers. Also, some insurers make aggressive use of not-at-fault penalties, while other insurers make more limited or no use of such penalties.

The study has been criticized by the by the auto insurance industry for its particular method of comparing insurance costs, as well as with the groups data collection and conclusions based on the data, but the study was successful in highlighting the need for consumers to compare insurers to ensure they aren’t paying more than they have too.

The study is also a reminder of the fact that insurance companies have different approaches to handling claims coverage and different policies for modifying the terms of coverage after accidents. While insurance companies have the duty to act in good faith toward policyholders, there is certainly opportunity for abuse, as in any other industry. Consumers who have valid claims denied, whose claims are underpaid, or who are penalized unfairly under the terms of their policy, should work with an experienced attorney to ensure their contractual rights are protected. 

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