A car accident carries a myriad of complications. You have to have your car assessed and then fixed, and you may even need to deal with a police report.
Then, your insurance bill comes and you quickly discover that it has risen sharply, because you have a car accident on your record. Are you stuck with high rates for the rest of your driving career?
There is good news. A car accident doesn’t stay on your insurance record forever. After some time, it goes away and your insurance rates go down again, provided you have an excellent driving record in the meantime.
How a Car Accident Affects Your Insurance
Auto insurance companies make it their business to calculate risk. They base their premiums, the amount you pay monthly, on your chances of making a claim.
If you have a history of a lot of claims, meaning you’ve had to use your insurance often in the past, you will have to pay a higher premium. If you haven’t had any accidents in the past or have never had to make a claim, you’re a good risk. Your insurance company will see this and reward you with a low premium.
Thus, car accidents affect your insurance premium. If you’re not at fault, the accident will still affect your premium unfortunately because your insurance will have to pay out. If you caused the accident, you will see your premiums go up even more.
The rise in your car accident insurance premium will not last forever, though. Car accidents typically stay on insurance records for three to five years. This means in as little as 36 months, you’ll see your premiums go back down.
The actual timing depends on the insurance company as well as the state where you’re insured.
The higher the risk you are, the more your premium will cost. This is why adolescent drivers cost more than 30-year-old drivers. It’s also why your insurance will cost a great deal when you’ve had a DUI or reckless driving charge.
If you’ve had an accident caused by such driving, you can expect the accident to stay on your insurance record for longer than if you’ve had just a basic no-fault car accident.
How Much Do Insurance Rates Increase After an Accident?
Your car insurance premium will increase after an accident. The amount it increases, will vary depending on what type of accident you had and how severe the accident was.
If you have full coverage, you can expect your insurance rates to rise approximately 3% if the accident causes damage to only your vehicle. If your accident causes bodily injury or property damage, your rates can increase by as much as 32%.
If you have two at-fault accidents that cause property damage exceeding $2,000, then your insurance can increase by more than 110%.
As you can see, the type of accident and the amount of damage caused correlate directly with the cost of your monthly premium. The insurance company you have will also affect the cost of your premium. Some insurance companies do not raise rates as steeply as others do.
How to Deal With Car Insurance Rate Increases
You don’t have to just swallow the premium rise after you’ve had a car accident. You still have a few choices that can reduce your car accident insurance cost.
Begin by shopping around. Some insurance companies don’t even raise rates after you’ve had an accident. You may be able to find a stellar deal on car insurance.
Then, lower your coverage limits or raise the deductible. When you raise your deductible, your insurance premium typically goes down. You will sacrifice some coverage in the process, though.
If your insurance company offers other types of insurance, ask about bundling your car insurance with other policies. You may be able to pay less for your auto insurance when you bundle it with homeowners’ or renters’ insurance.
Then take advantage of usage-based insurance. Some insurance companies have now begun offering their customers the opportunity to use a telematics device in their vehicle. This device tracks the driver’s behavior.
Such tracking can result in much lower premiums based on your excellent driving skills. So instead of you telling your insurance company that you’re a great driver, they will see that you’re a great driver.
Look at all of the discounts available to you. Other insurance companies will offer premium discounts for a variety of qualifiers. Here are a few of the most common discount qualifiers:
- Veterans
- Good students
- Recent graduates
- Cars with anti-theft devices
- Taking a defensive driving course
- Insuring multiple cars
- Customer loyalty
Every dollar counts, so look for a company that respects these discounts. You may also qualify for a low-mileage discount. According to the Federal Highway Administration, the average driver puts on 13,476 miles a year. If you drive less than this, you’re a low-mileage driver.
Drive Safe, Save Money
A car accident will ultimately raise your insurance premiums. But you don’t have to live with expensive insurance for the rest of your lives. You can do a few different things to lower your rates, and you can wait out the time with an expensive premium.
Do some shopping around. Find an insurance company that will work for you and offers you the rates you need. Look into deals and discounts at insurance companies.
If you do this, you will find yourself with excellent insurance and saving money in the process.
Do you need auto insurance? If so, contact us and get a free quote. We are ready to help you find the most affordable and thorough insurance for you.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
