How Accidents Affect Car Insurance Policies and Premiums
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For some drivers, getting back behind the wheel after an accident can be difficult. Depending on their policies and the states they live in, drivers can experience significant increases in insurance premiums after an accident. The increase in premiums depends on who was at fault and whether bodily injury claims were made. If a driver is not responsible for an accident, his rates will probably not increase. However, some insurers may still raise rates for drivers involved in crashes, even if the drivers are not at fault.
To better understand what will happen with the auto insurance policy after an accident, consider the following:
Why do car insurance premiums increase after an accident? Insurance companies consider driving records when creating insurance policies. Insurers consider drivers who have recently been involved in an accident more likely to file a future claim than drivers who maintain a clean driving record. These drivers present a greater financial risk to their insurer and are usually charged more to cover the risk.
- What is accident forgiveness? This is an option a driver can add to their policy to avoid a rate increase after an accident. When a driver who has an accident insurance policy gets into a collision, they can lose the accident-free discount, but the provider won’t penalize them for being involved in an accident. To qualify for accident forgiveness, most providers require drivers to maintain a clean driving record before adding this option to their policies. Inexperienced drivers and parents who have teenagers on their auto insurance policy are advised to get this option if they fear a premium increase after an accident. Usually, accident waiver generally only applies to one at-fault accident, and any subsequent accidents may increase the premium.
- How to lower the auto insurance premium after an accident. Drivers who do not have accident forgiveness and have been involved in an accident can still afford affordable insurance rates. First, drivers should check whether they qualify for discounts such as low annual mileage or multi-car discounts. They can also get discounts for keeping a good driving record or for taking a defensive driving course. Plus, they can pay a lower premium by increasing the deductible. Finally, drivers involved in an accident can save money by comparing rates from different insurers.
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