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Five Common Myths About Car Accident Insurance Debunked


Insurance is known for being complicated on purpose, and car insurance is no exception. It’s something that every driver needs, few people fully understand, and involves large sums of money. That’s the perfect environment for inaccurate information to spread.

Some of these inaccuracies come from understandable misinterpretations of real regulations, while others are propagated by insurers. Regardless of the source, believing false information about insurance can prevent you from getting a fair settlement after getting in an accident. We’re debunking five common myths about how car insurance claims work so you’re better prepared for your next accident claim. 

1. Your Insurance Rates Automatically Go Up If You Report an Accident

One of the most common false beliefs about car insurance is that your rates will always go up after you report an accident. While insurance rates are tied to a driver’s safety record, this only matters if the driver was the one who caused the accident. Most insurers do not significantly raise rates if the driver is not at fault. 

In fact, it is against the law in California for an insurer to raise rates for drivers who were not “principally at-fault” for an accident. If you report an accident caused by another driver or something outside your control, your insurer cannot increase your premiums. 

It’s important to report accidents to your insurer to make the most of your policy. Don’t let a fear of unreasonable rate increases prevent you from making a report.

2. You Can’t Get Compensation If You Were at Fault

What if you were partially responsible for an accident? You might hesitate to report the collision because you’re worried your rates will increase and you’ll get no compensation. Luckily, that’s not true either. 

California is a pure comparative negligence state. This standard means that more than one person can be responsible for an accident. If multiple parties are at fault, “pure” comparative negligence laws mean that they will split the total damages for the accident according to their levels of responsibility. 

For example, suppose you are distracted when driving through an intersection and hit a driver who ignored a red light. You could have stopped and avoided the accident if you hadn’t been distracted. However, the other driver is also partially responsible because they ran the red. In this case, the other driver may be 80% liable, while you’re only 20% liable. If you file an insurance claim, you could receive up to 80% of your total damages despite being partially responsible. 

3. Your Insurance Company Is on Your Side

Most people assume their insurer is on their side because they pay it for a service. Unfortunately, that just isn’t true. Insurance companies are on nobody’s side but their own. Regardless of your safety record, the cause of your accident, or how long you’ve been a customer, your insurer’s goal is to pay as little as possible.

Believing your insurer has your best interests in mind can be particularly harmful if you trust them to give you a fair settlement offer. Many companies will underpay or outright deny claims in bad faith that should be covered in full in hopes that you won’t try to fight back. You can often dispute or negotiate the settlement to receive a better deal.

4. Car Accident Insurance Disputes Have to Happen in Court

You may hesitate to dispute an unfair settlement because you assume it will automatically lead to a long, drawn-out court battle. That’s rarely the case. Insurers don’t want to spend the time and money to fight you in court any more than you want to fight them. Instead, most disputes are settled long before they head to the courtroom.

What usually occurs is much simpler. When you refuse the initial offer, your lawyer can submit a counteroffer in an official demand letter. This gives the insurer a better idea of what you’re willing to accept. It has 15 days to respond with an acceptance, a counteroffer, or an explanation of why it refuses to adjust its original offer. From there, you can negotiate until you reach a fair settlement.

5. You Can’t Afford an Attorney

If you noticed the word “lawyer” earlier, you might think that any car accident injury claim is out of your reach because you can’t afford an attorney. However, personal injury lawyers are much less expensive than many people realize. Attorneys work on retainer for more injury claims.

Working on retainer means that you do not pay the lawyer up front. Instead, they are compensated if and only if they help you reach a settlement. If they don’t help you, you pay nothing. Furthermore, if your case goes to court and you win, the insurer will usually be ordered to pay your legal fees on top of your insurance damages. 

This has two benefits. First, it ensures that you can always afford a lawyer to fight back against money-hungry insurers when they try to deny a claim. Second, it incentivizes your attorney to fight their hardest to get you the largest settlement possible. You have everything to win and nothing to lose.

Get Expert Legal Counsel for Your Car Accident Injury Claim

Now that you understand the ins and outs of car insurance claims better, you can see why having an attorney on your side is so important. If you’ve been hurt in an accident, don’t wait to get help. Get in touch with the expert personal injury lawyers at Ellis Helm, APC, today. We are dedicated to advocating for accident victims in Temecula and the San Diego Metro area, and we’re prepared to help you get the damages you deserve.