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How Do Accidents Affect Insurance Rates?

Many drivers today don't want to file an insurance claim following an accident with their car insurance provider unless there's absolutely no way around it. How accidents affect car insurance rates is a big fear among many drivers. Why? They're worried that their premiums will get too expensive.

If you're involved in an auto accident, your car insurance premiums may or may not automatically increase. Whether your rates will actually go up and by how much will primarily depend on a number of things such as, the circumstances regarding the incident, your particular insurance provider, and if your policy carries accident forgiveness.

Sometimes, people experience an increase in their insurance rates even if they're not liable for causing the accident. Even though you can't be 100% sure how filing an insurance claim will ultimately affect your rates, you can predict the outcome to a certain degree based on the following aspects.

Here are some of the main deciding factors that your insurance provider will no doubt consider when they're determining whether or not to hike your rates.

1. Who was the driver at-fault?

You should expect your insurance premiums to go up if the accident was indeed your fault. However, if the accident was due to the fault of the other driver, your rates will likely remain the same in most cases. But, there are always some exceptions to the rule, such as:

• Your insurance premiums will probably rise regardless of who actually caused the accident if you reside in a no-fault state since both companies will pay for a portion of the total costs.

• If your insurance provider considers you a 'high risk' in general, your rates may still go up since you're more likely to be involved in another accident, statistically speaking.

2. How severe was the accident?

An auto collision scenario can vary widely. It may involve something as simple as a small scratch in the car's paint to a completely totaled car or truck. More damage usually means higher increased rates since the insurance provider has to make a substantially bigger payout in the end.

3. How valuable are you to your insurance provider?

Overall, it's cheaper for insurance providers to cover safe drivers, ones without multiple speeding tickets, moving violations, or accident claims.

• If you've been with your insurance carrier for a considerably long time and have a long and generally safe driving record, you will likely experience a less dramatic rise concerning your rates over a driver with a less than stellar driving record. In many cases, minor fender benders and small accidents don't lead to rate increases, especially if you're an otherwise safe driver overall. Again, not all car insurance rates will automatically increase following an accident.

• Some insurance providers offer good drivers what's known as 'accident forgiveness', meaning that your first car accident is essentially 'forgiven' and won't lead to increased premiums. Many companies today like to reward safe drivers with good driving records since they consider them a valuable asset to their company in general.

Car Accidents and Increased Premiums

Being a safe driver is the best way to avoid getting into an accident. But, in reality, accidents do happen sometimes, which is obviously why you're insured in the event that it ever does. If an accident does occur, your insurance provider has the job of getting you through the entire process. If you recently made a claim, you'll soon find out how much it went up once your policy is renewed.

How Long To Expect Higher Premiums If They Do Go Up

Following a car accident or some other type of moving violation (i.e. speeding tickets), expect your driving history to stick around. Most insurance providers consider the severity of an accident along with the cost of the damages in order to determine the length of time and the dollar amount of your increase you'll ultimately be subjected to. But, if you go from year to year without another collision or moving violation, it's likely that your rates will decrease as well. In most states, the hikes in car insurance premiums will gradually decrease over the course of three years until they essentially no longer exist provided that you keep your driving record clean.

How to Handle an Increase in Your Car Insurance Premiums

When applying for car insurance, it's crucial to know all the details of your policy. Ask your provider about which specific situations or circumstances may lead to rate increases. If you are, however, stuck with a hike in your premium due to an accident or moving violation, don't be afraid to discuss all your options. In many cases, drivers are able to reverse their rate increases by petitioning an at-fault finding regarding the incident. But, if your increased premiums are inevitable, you can likely keep your rates relatively low by simply increasing the amount of your deductible instead.

Most drivers are often worried how accidents affect insurance rates. However, by practicing safe driving techniques and talking openly with their insurance providers, even if something unfortunate does happen, their fears can be put to rest.