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Why do auto insurance rates rise after an accident?
Insurance companies are risk averse and in the business of making money. These are old companies in it for the long run. They have shareholders to consider, and have to pay out major claims if their covered drivers are found to be at-fault. If you file a claim, you likely have found that your premiums increased. You're not alone. Considering that the rates tend to stay high for about three years after each claim is filed, those rate hikes pretty much pay for the damages you’ve been paying your insurance premiums to cover. It’s almost like the car insurance company is giving you a loan to cover your accident losses that you pay them back for over the years. For more information on why car insurance premiums increase after a claim, click here.