Numerous factors dictate what you pay for car insurance, including your age, gender, marital status, zip code, credit score, and what car you drive. Your car accident history is another big factor for your insurance company to consider.
Perhaps you assume that if you’re in an accident, your premiums will automatically increase, but that’s not necessarily true. Several variables influence your insurance provider’s decision to raise your rates or not.
Why Do Insurance Rates Go Up After a Car Accident?
There are two reasons for this:
- Added risk: Insurance companies charge low-risk drivers less money for the same coverage. Historical data shows that drivers who have one crash are more likely to get into another, so your insurer may now view you as a greater risk. Increased premiums are a way to counteract this risk.
- Fees associated with filing a claim: Your insurance company must pay the claim adjuster for their time and cover the cost to repair or replace your car. These fees are not accounted for in your monthly premium, so if you utilize them, the insurer could raise your rate to offset their own costs.
Will Your Insurance Rates Increase After an Accident?
Before adjusting the monthly premium, your car insurance company will want details about the accident. If any of the following is true, you might expect your rate to go up:
- You were responsible for the accident.
- The at-fault accident caused significant property damage.
- Someone was injured or killed in the at-fault accident.
- You were charged with a DUI/DWI at the time of the accident.
- You have a history of reckless driving or moving violations.
- You currently have a safe driver discount (you will lose this after the accident).
If your insurance company decides to increase your rate, it most likely won’t occur immediately. Instead, the rate increase should take effect when you renew your policy. Depending on the company and the severity of the accident, your rate increase penalty may apply for the next three to five years.
Your Rates Might Not Go Up
Being at fault for an accident doesn’t guarantee a rate increase. If you have been with your insurer long enough, you may have accident forgiveness, a “free pass” for being involved in an at-fault accident once every few years.
Here are the other factors that lower the risk of insurance rate hikes after a car accident:
- You weren’t the at-fault driver.
- Bad weather caused the accident.
- You were involved in a minor fender bender.
- No one was hurt in the accident.
- You had a spotless driving record before the collision occurred.
Working with a car accident attorney is the best way to minimize costs and maximize your settlement after a collision. With over 100 years of combined experience, Law Firm of Kevin Paul Childers can help you receive the compensation you deserve. Let your voice be heard—contact us to begin the fight for a fair settlement.