Get Exactly The Right Home Insurance For You

Get Exactly The Right Home Insurance For You

How Will a Car Accident Affect Your Auto Insurance Rates?

Yvonne Harvey

When you've been in an auto accident, you may be more concerned with getting better than what will happen to your auto insurance. However, accidents must be reported to your insurance carrier, and they can affect your premiums. If you have recently been in an accident that was or was not your fault, you need to check out these three facts you must consider after an accident.

Your Premiums May Increase

Insurance companies don't like paying for your accident, so if you are responsible, don't be shocked if your premiums increase. If you're responsible, your insurance carrier has to pay for your damages/injuries and the other driver's too, which can quickly add up. To counter set some of these higher costs, your rates increase. Some insurance carriers, however, offer accident forgiveness polices, which protects your rates after your first accident.

If you didn't cause the accident, you may still see your rates increase. This isn't to punish you or make you pay for the damages. Insurance carriers typically believe that if you got into one accident, even if it wasn't your fault, you're more likely to get into another accident, which increases your risk. A higher risk means higher premiums. In some states, like Massachusetts, however, it is illegal for your insurance carrier to increase your premiums unless you are more than 50 percent responsible for the accident and have a claim amount of over $500 (after the deductible.)

Many Factors Affect the Increase

There isn't a flat percentage or rate that the insurance carrier increases your rates after an accident. They take many factors into account. One big factor is your driving history and record. One driver, with a flawless driving record may see a minor increase even after causing the accident. On the other hand, a driver with a terrible driving record, will see a higher increase. Keep in mind, they don't just look at your previous accidents. They will also consider other driving violations.

Another factor that plays a big role in how high your rates increase is the severity of the accident. A minor fender bender that causes no pain and a little scratch won't raise your insurance rates much because the cost to the insurance carrier is less. On the other hand, a wreck that totals a car and sends someone to the ER, may skyrocket your rates.

The Increase Is Temporary

If you do notice an increase in your rates, don't worry. The rate increase is only temporary, unless you continue getting into accidents and causing other traffic violations. Again, how long you must pay the higher rates depends on the severity of the accident and your own driving history. Most of the time, the rates slowly lower each year, and in many states, it's only three years before your rates fall again.

Of course, three years is still a long time, so if the accident is minor, you may be tempted to not report it. However, this can cause more problems than it solves. When you take out an auto insurance policy, you agree to report any accidents. If you fail to do so, and the insurance carrier finds out, they could actually drop you as a customer. They can also refuse to back up your policy in the event of a lawsuit

Don't let your policy lapse just because you're afraid of a rate increase. Accidents must be reported, and even if your insurance premiums do increase, it won't last forever. If you would like more information regarding auto insurance coverage regarding accidents, contact your insurance carrier or another you like in your area today. 


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About Me
Get Exactly The Right Home Insurance For You

My name is Krista McMullin and this is a blog about home insurance. Life is full of uncertainties, but it doesn't have to be. For every uncertainty, there is often a form of insurance that can be used to help you feel less nervous. However, some of these forms of insurance may be unnecessary. How do you know exactly what form of insurance you really need? I always wondered this and I have spent a lot of time studying home insurance policies and various situations in order to come up with the perfect home insurance policies for each individual. I hope my blog is helpful to you.