What Happens To Car Insurance Rates After An Accident?
If you were involved in an auto accident, you may be wondering if your insurer will cancel your policy or raise your rates.
Don’t worry. Many times, you still have protection. Here’s a look at what you can expect along the way.
Do Rates Increase After A Car Accident? Let’s say the wreck was your first accident. Your vehicle doesn’t have a lot of damage, and you didn’t do a lot of damage to the other party. Will your rates go up? Many times, auto insurance companies will adjust rates depending on the situation itself. It’s important to know when your rates can jump significantly and when they are not likely to increase by much.
Minor Damage: In situations where the damage is minor, your auto insurance company is not likely to increase your rates drastically. Most often, insurance companies expect their clients to see at least a few claims during their lifetime. Minor claims may cause only a small rate increase.
Big Accident: Let’s say your claim is very high. Perhaps you struck a deer and have a vehicle the insurance company plans to total. Or maybe you caused a wreck because you were driving drunk. In cases like these, your rates may rise significantly because the insurer has to pay for all the repairs or a replacement vehicle. Furthermore, an accident like a DUI may clearly signify you’re a high risk to insure, and the insurer will have to cover their cost risks.
No Major Accidents: Perhaps you’re a driver with a long history of safe driving. You have neither a lot of claims nor any major moving violations on your account. This is a good indication that rates won’t drastically increase. (But again, it depends on the situation.) If you’ve had no claims at all during your last policy period, you’ll likely see no increase at all.
When Will Rates Go Up?
Every auto insurance company provides information about factors that can increase premiums and lead the company to drop your coverage. Most often, this includes repeated claims or reckless driving claims. Many policies aren’t likely to raise costs in the middle of the policy. If rates are likely to increase, they may happen when you renew your policy down the road.
There Is Help Available to You
If you have just a minor accident on your record, let your agent know. They can help you file a claim and move on. Most often, your auto insurance company can also give you insight into what to expect when you renew.