How Do Accidents Affect Your Auto Insurance Rates?

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One of the most influential details that insurance companies examine when rating motorists is a vehicle owner’s accident record. Many insurers believe that the number of claims that a person has filed in the past three years, often directly corresponds to their likelihood of filing a claim in the future. If a motorist has a history of automobile accidents, they will likely to be considered a high risk driver, and face higher rates.

The reason why premiums usually increase after an accident is because insurers usually feel like they should financially compensate for the increased risk of insuring a motorist with a history of claims. At times, an insurer may also cancel a policy entirely in response to an accident. Maintaining a poor driving record could lead to the loss of discounts, difficulty finding cheaper coverage in the future, and vehicle owners may be placed in the non-standard market.

The exact amount that a motorist’s premium will go up after an accident frequently depends on a company’s surcharge value. This is the predetermined percentage or amount that insurers usually add to a premium after a policyholder receives a ticket for a moving violation, or files an at-fault claim. This value will likely be different for every insurer, so it’s important to research this information before buying a policy.

The likelihood that a motorist’s rates will increase after a claim is filed is largely dependent on a number of details. If the policyholder is not responsible for any damages, or the collision is only a minor fender bender resulting in little to no damages, there is a good chance that the motorist’s rates will stay the same. If the policyholder is at-fault, however, they can expect to see a surcharge.

Other high-risk infractions that may coincide with an accident can also contribute to higher premiums. For example, if a motorist is at-fault for a collision and convicted of driving while intoxicated, policy prices are likely to increase considerably. It’s important to know, however, that if a vehicle owner’s premium gets too high after an accident, they can shop around for a potentially lower price.

If a motorist is looking for a policy and needs to know how much is car insurance going to cost, they should shop around and gather quotes from as many sources as possible. Coverage providers typically use different rating methods to set policy prices, and some insurers may look more favorably on an accident record that includes multiple claims. Exploring multiple options help a vehicle owner find a more affordable option.

If a motorist wants to switch insurers, they should take extra precaution to avoid a lapse in coverage. Canceling an existing policy before purchasing a replacement may leave a motorist temporarily uninsured and at risk of receiving wide range of penalties and fines. In many different states, all registered automobiles must be insured at all times. If a lapse is detected, the vehicle owner may be fined, lose their driving privileges, or risk additional consequences.

To efficiently shop around, motorists are encouraged to utilize many of the resources that are available online. The advantage of making premium comparisons over the Internet is that it allows drivers to see potentially dozens of quotes at once. The more options that a vehicle owner has, the better their chances are of finding an adequately priced plan despite having a blemished driving record. Even if a motorist’s rates are increased after an accident, there are still many options that can help decrease coverage costs, as long as drivers are willing to make the extra effort.

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