Auto Insurance

How Much does Car Insurance go up after an Accident?

car insurance premium

It is not only that car accidents can cause harm to you and your vehicle, but they can do significant damage to your car insurance premium, drivers involved in at-fault, injury on the body, or pricey property damage incidents currently average an increase of 31 percent in their car insurance rates. There are many ways of reducing the impact of an accident on your car insurance. There are some car insurance providers that offer forgiveness programs for an accident that help minimize increases in your insurance premium following an accident, so it may still be possible to find cheap car insurance after an accident.

The more damage you do in your accident the more damage you do, the more you can expect to see your premiums increase, if you have a history of past accidents then you can expect an even steeper rate hike because you will look like a risky driver. The comprehensive coverage steps in when damage befalls your car that isn’t related to a collision. You might file a comprehensive claim because your car was stolen or vandalized or because a tree limb fell on it, for example. It is still worth filling with your insurer to get the coverage you need to restore your car to its pre-incident glory, though these claims can increase your premium slightly. The average increase rate following an accident may vary from state to state. For example, in drivers of Minnesota face the sharpest rate increase at 87 percent, while drivers in New York average a much smaller rate increase of 12 percent. Insurance companies in Maryland can base premiums on factors including gender, age, occupation, credit score, and marital status. The broader states base of rules for insurance companies may punish unmarried young men with bad credit whether they are good drivers or not, but it is likely the reason for Maryland reporting as the lowest after-accident premium surges of any state.

Why do insurance rates go up after an accident?

The average increase rate following an accident may vary from state to state. For example, in drivers of Minnesota face the sharpest rate increase at 87 percent, while drivers in New York average a much smaller rate increase of 12 percent.

Most of the insurance providers do not raise rates to punish you, instead, insurers adjust your rates after an accident to reflect the new data you gave them by getting into a collision. When the insurer know you drive in a way that you may cause an accident, they perceive you to be a riskier driver — and they have your accident to back that perception if you are riskier, providers pass that risk on to you in the form of higher premiums. However, this increase is not permanent, and most rate increases will fall off after a few years. Most auto policies last for six months or a year, depending on your state. One of the best times to check out other carriers and their premiums includes when you move. The distance you drive to work, your zip code, and whether you park in a garage will all impact your insurance premiums. You should also look at insurance options following other big life events like getting married because married people often get lower rates. For example, if you are moving because you bought a house, you often can bundle your home and auto insurance to save money. Almost every car insurers give discounts when you add another car or driver to your policy or any time you bundle policies.

By chance you have an accident or an open claim, it might not be a good time to switch or you may have to deal with two insurance companies while the details of the claim are settled. In addition, usually, the insurance companies recalculate your rates around your renewal time, a new insurance company might calculate your rate higher than your current rate higher than it would be if you stay with your current provider for a few more months.

What if the accident was not my fault?

If your insurer does not have any offer of accident forgiveness, whether or not your rates will increase after an accident in which you were not at fault is insurance provider specific. There are some providers who will not be going to increase your premium if this was your first accident, but if you have several accidents, even if you are not at fault, it could result in an increased premium, your provider looks at how risky you are to insure. In case you have an at-fault accident, you are higher risk and if you have one not-at-fault accident, you may not be perceived as a higher risk. While by any chance you have several not-at-fault accidents, that will increase your perceived risk level with the insurance provider because you are driving in high-risk for accident situations, whether you are at fault or not.

Prices may vary from company to company, so it pays to shop around. When you need insurance you can call companies directly or access information through the Internet, your state insurance department may also provide comparisons of prices charged by major insurers. Everyone buy insurance to protect themselves financially and provide peace of mind. So it’s important to pick a company that is financially stable. Thus you need to check the financial health of the insurance companies with rating companies such as best and standard & poor’s and consult consumer magazines. Before buying a new or used car, check into insurance costs. Premiums of car insurance are based in part on the car’s price, the cost to repair it, its overall safety record, and the likelihood of theft. There are many insurers who offer discounts for features that reduce the risk of injuries or theft. For deciding what car to buy, you can get information from the Insurance Institute for Highway Safety. Some insurance companies offer discounts to motorists who drive a lower than an average number of miles per year. There are low mileage discounts for drivers who carpool to work. Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business, and alumni groups or from other groups and associations.

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