How Does An Accident Affect My Car Insurance?

Want to know what happens to your insurance premiums when you get into a car accident? This guide will explain what happens to your auto insurance rates when you are involved in a not at-fault accident and when you are involved in an at-fault accident.

Are You Not At-Fault or At-Fault?
The first thing you need to know is whose fault is it? This is usually communicated to you by your claims adjuster. Now it is not up the the claims adjusters to decide who is at fault but rather the police. The police will do an investigation into the particular accident and file a report deciding who is at-fault, the claims adjusters will then use this information to decide how coverages will be paid out.

Not At-Fault Accident
A big misconception that people think is that when you get into an accident and it is not your fault your rates will increase. Some people are even afraid to notify their insurance company they have been an accident for fear that they will jack up their rates. This is absolutely false. No insurance company will increase your premiums for the reason that you are deemed “not at-fault” for the accident. Please re-read that sentence again before we continue.

Now does this means that when you go to renew your auto insurance for the next year that it will cost the same as last year? No. There are many other reasons an insurance company can raise your rates, for instance, to cover their increased costs due to a recent hurricane. But insurance companies are not allowed, under any circumstance, to raise your rates as a result of a not at-fault accident.

However, if you get into multiple “not at-fault accidents”, usually more than three, they can ask you to increase your certain deductibles. But again, they will not raise your rates. So if you are involved in a not at-fault accident and your vehicle is severely damaged, please make your insurance company cover the costs of repair as that is what you are paying them to do.

At Fault Accident
If you are involved in at-fault accident your auto insurance rates will likely increase on renewal. Now there are special exceptions, for example, if your insurance company offers “accident forgiveness” coverage then your rates will not go up for your first at-fault accident -but be damn sure they will be going up on your second at-fault accident. By how much your rates go up depends on your insurance company. As each company differs how much they charge you can see increases of 10% to 50%.

Also keep in mind that if you are involved in multiple at-fault accidents, usually more than two or three, your insurance company will likely non-renew you. This means that they will terminate coverage on your vehicle on your next renewal, leaving you to have to find new coverage with a non-standard auto insurer -which is a company that insures higher risk drivers.

When you are forced to take insurance with a non-standard insurer you are likely going to have to pay a surcharge for each at-fault accident you are involved in. For example, if you have 3 at-fault accidents in the last five years, you may see a surcharge off 30%. Keep in mind again that each non-standard insurer charges a different surcharge so it is best to shop around for the lowest price.

How Long Does an Accident Remain on my Driving Record?
Insurance companies order driving reports that have your entire driving history recorded since you started driving. Every accident, every insurance company, every policy number and every vehicle you have ever had is presented on this document. Luckily for you, insurance companies usually only go back five years, so that accidents that occurred over five years ago will not affect how they rate you today. The general rule of thumb is that the farther in time an at-fault accident occurred the less of an affect it will have on your car insurance rates.