Unfortunately, car accidents are a common occurrence. It happens when a driver loses his focus, or the car misbehaves, or for numerous other reasons. Being reckless when driving is good for neither you nor those around you. People and property get hurt and damaged, especially when irresponsible drivers are behind the wheel. Lets know how much does your car insurance go up after an accident.
We all know that insurance companies take your driving history, tickets, and accidents into consideration when calculating the price of your insurance premium. You want to make sure that you put your best foot forward to avoid additional costs. We are going to explain how getting into accidents affects your policy. Stick around to find out! If you would like to explore on your own, make sure to visit https://www.surex.com/Insurance/auto-car/ontario!
Why Do Premium Rates Go Up?
Once you get into a car accident, your insurance company must update your premium. This is not to punish you but to mark you as a risky driver who might bring more loss over time. Insurance companies are big businesses and not charities, which is why they do not forgive and forget. However, there is one instance where they might overlook an accident, which we will touch upon later.
After your rates go up, you might also become more aware and responsible when driving, which is why it is completely legal for insurance companies to hike the rates. Also, the drivers that are aware of this consequence will more likely drive carefully.
Types Of Accidents
Insurance companies consider two types of accidents when raising the rates – at-fault and not-at-fault accidents. At-fault accidents are those that YOU caused, and hence you must cover the damage. On the other hand, not-at-fault accidents are caused by the other party and you are completely innocent.
Now, insurance companies will surely raise your premium when you get into an at-fault accident. Unfortunately, the converse of it is not true. Some companies will not raise (but some will) the rates if you get into a not-at-fault accident.
On the other hand, certain insurers tend to raise the price after any claim, regardless of your involvement. This might seem unfair, but companies have this policy for different reasons. Most of all, they do this to protect themselves. Furthermore, even if they charge you when you are not at fault, the cost will definitely not be the same if it had been an at-fault accident. Therefore, keep your eyes open, and drive cautiously on the road!
The premium price in these cases is never predetermined. Rather, it is calculated after considering a variety of factors. Insurance companies raise the rates based on the circumstances, the type of the accident, your record, coverage, etc. Depending on where you live and other factors, your rates can go up to 50%.
In other words, let us say your premium was $2000, and the rates were raised by 35%. This means that an additional $700 will be added to your annual premium after the accident. One can easily conclude that insurance companies do not want to be in bed with risky drivers. Try your best to avoid being in such a pickle in the future!
You have numerous options when choosing your insurance coverage. Accident forgiveness is one such option. It means that you will get one at-fault accident forgiven – the company will not raise your rates. Of course, this only counts if that is your first accident with that particular company.
Furthermore, you should know that accident forgiveness, like any other coverage, adds to the overall price of your policy. You need to figure out if it works for you or not. This seems like a good option if you want to make sure that you do not stain your record, courtesy of just one mistake. Feel free to look into this option to see how it works.
Are The Rates Increased Permanently?
Once the insurance company raises your rates, the hiked prices will linger for quite some time. However, it does not last forever. If you keep a clean record, the insurer will most likely forgive you within 3 to 5 years. This also means that you cannot get into more accidents during this span. Also, try to avoid tickets.
How Can I Lower The Rates Again?
Apart from keeping your driving record straight, there are a couple of things you can do to lower the rates again. First, you can increase your deductible amount because the higher the deductible, the lower the premium. Moreover, make sure to be on the lookout for any discounts that may apply to you.
Another thing you can do is change your coverage. If you have mandatory coverage plus some other types, consider dropping the other ones. These may include comprehension of collision coverage.
Get New Quotes
Once you get into an accident and file a claim, this will be on your record, and every company will be able to see it. However, just because your company increases the rates significantly, it does not mean that this will be the case with every insurer.
Some insurance companies might offer you lower rates than others, so this may be the right time for you to explore your options. Consider hiring an insurance broker to help you with this. However, do not forget to conduct a thorough inspection before changing your insurance company.
When Should I Inform My Insurer?
Your insurance company should learn about the accident as soon as possible. It does not matter if it is a minor accident or a massively damaging one, notify your insurer and give them all the details!
Try to take pictures of the accident, write down everything you can, and stay fair. Make sure you do not lie and thereby lose their trust completely. Also, never admit guilt on the spot unless you are 100% guilty. There might be some trifles that could change everything!
Overall, be a responsible driver and do not condone reckless behavior on the road. Make sure to follow legal regulations, and you should be clear of at-fault accidents. Indeed, your premium will rise after an accident but you can always bring it down.