If I Get in an Accident – Will My Car Insurance Increase?
Having a “clean” driving record saves you money on car insurance for a reason. Insurers use your past driving history as a predictor of your driving future, and having no accidents or only one or two minor accidents makes you a better risk. Getting into an accident can change all that, and depending on the accident and the insurer, you will probably have to pay a higher insurance premium because of it. How much your premium will increase if at all varies between states and between insurance companies.
To find out how an accident will affect your car insurance premiums, check your policy. Some insurers will forgive a first-time accident, a minor accident or an accident in which you were not at fault. Some states also have laws that govern what an insurer can use as justification to raise your premium. It pays to research your particular policy before signing it, but if you find out that your current insurance has stricter regulations than you are comfortable with, it’s easy to switch your policy to another insurer. Most insurance policies allow termination at anytime without penalty.
If you have a minor fender-bender, you may get away with not having to pay more in auto insurance, but it depends on where you live and who your insurer is. Some states have laws to prevent insurers from raising premiums for accidents that result in damage under a certain dollar amount. Additionally, some auto insurance companies offer “accident forgiveness” for their customers. This policy usually only applies to your first accident and sometimes is only available to customers who have been with the insurer for a certain number of years. In general, however, minor accidents in which you were not at fault, there were no injuries and you didn’t file an extensive claim should have little to no effect on your premiums.
The most damaging accidents in terms of your insurance policy premiums are the ones that involve alcohol. If you were driving drunk and got into an accident, you can expect your auto insurance premiums to skyrocket, that is, if your policy isn’t canceled outright. Of course, in that event you will likely have bigger worries than just your car insurance premiums—jail time, losing your license and heavy fines. Severe accidents where alcohol is not involved, but you are determined to be at fault can also cause a dramatic increase in your car insurance quote. Typically, an insurer will define a severe accident in terms of how much the company has to pay out. The increase usually takes effect when your policy is up for renewal and can come in the form of surcharges or the removal of previous discounts.
It’s hard to say how much your auto insurance premiums will increase after an accident because so many factors go into that calculation. For example, insurers will take into account your previous driving history, and someone who has a history of other driving infractions will probably end up paying more than someone who doesn’t. Each situation is evaluated independently. If you rates go up more than you feel is fair, you can always shop around for a better rate from another insurer.