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How Does an Accident Affect My Car Insurance Rates?
Insurance is here to protect you from the enormous expenses and bills that can come from an automobile accident. It is well documented that many variables affect your car insurance rates, including where you live, the coverage levels that you get, and your driving record. One of the essential questions that people ask is whether or not an accident affects your car insurance premium. Many people will tell you that it will, but the reality is slightly more complicated.
How Much Your Car Insurance Rates Go Up After An Accident?
Many car insurance companies will talk about their accident forgiveness programs or good driver discounts. Accidents have quite an influence on your premiums. After an accident happens, rates can increase up to $250 or more depending on if there are personal injuries or just vehicular damage. Of course, rates vary across companies, so it is a smart plan to compare them when looking for the best prices.
Keep reading to get top information that will better help you understand how your rates can be affected by a car accident.
What Is An Accident According To Car Insurance Companies?
First off, not all accidents are treated the same when it comes to automobile insurance. In fact, some things that people talk about as crashes may not even count as an accident to car insurance companies. Auto insurance companies measure risk when determining rates; they also use formulas to determine what qualifies as an accident. For most companies, a combination of between $500 and 750 dollars or more of property damage liability coverage and collision coverage can qualify as an accident. Also, accidents need to be at least 50% percent your fault to be considered accidents. While each company can vary, these are two of the most common determining factors used when determining if a collision will change your rates.
There can be differences in how an accident will affect your rates if you are a new customer rather than a customer that has been with the same company for a while. There are also sometimes differences in what is considered an accident between new customers and existing ones. You can check with each company to determine what counts as an accident as a new customer and how it will affect your rates.
Car insurance companies each have different guidelines when it comes to rates, but many have similar thoughts when it comes to what is classified as an accident. Here are some of the things that a qualifying accident may need to raise your rates:
- At least $500 to $750 of damage or more.
- At least 50% your fault.
- An insurance claim and/or police report.
What Doesn’t Count As An Accident
It can be a little more complex to decide what does not count as an accident. Collisions that are less than 50% percent the fault of a driver is not considered an accident by most insurance companies. This can create complication because determining who is at fault can be hard to do sometimes. It leaves room for a lot of ambiguity.
There are a variety of things that are not classified as accidents to insurance companies. An accident may not be considered at-fault for the following reasons as well:
- If your car is lawfully parked.
- If a person responsible for the crash reimbursed the other driver.
- If they were reimbursed on behalf of a person responsible for the accident.
- A hit and run driver hit them (if the accident is reported to proper authorities within 24 hours).
- They were not convicted of a moving violation in connection to the accident, while the other person was convicted of a moving offense.
It is a good idea to look over the car insurance rule manuals to verify that these things are not considered accidents for the company you choose, as well as find other things the company you are considering does not include as an accident.
What Other Accident Factors Influence Rates?
The number of qualifying accidents you get into is part of what determines your rates. With each crash, you will likely be considered a higher risk. Another factor is whether or not a claim is made. If you are at fault, and make a claim, your rate may go up. If you do not make a claim, however, your rate might not change. Remember, if you have multiple accidents in a shorter period of time, your rates will go up even higher. Driving safely is the best way to keep your costs low.
Keep in mind that there are a lot of other things that can affect your car insurance rates when combined with an accident. Age can play a factor, but you may be able to save money by being pro-active with driving classes. Older adults (and others as well) can take special advanced safety classes to decrease rates.
The type of car you drive can also be a factor in auto insurance rates after an accident. Simply put, some cars are more expensive to repair than others. When people purchase a new car, sometimes they consider insurance rates while making the purchase. This is one way to save money on your rates.
Another variable that is taken into consideration is your age. Newer and younger drivers are more likely to get into accidents. Accident forgiveness might be something to consider as a younger driver. Younger drivers can have higher rates, but the premiums can go a lot higher after an accident. Senior citizens can also have higher rates due to an increase in the likelihood that they will be in an accident.
Additionally, the number of miles you drive can affect your rates. People that drive a lower number of miles pay less. After an accident, decreasing the number of miles you drive on average can help reduce your premiums. With all of the variables that can affect car insurance rates, getting into an accident does not have to be too burdensome. Talk with your insurance company, take advantage of discounts and accident forgiveness, and talk us here at General Insurance. Our company wants to give you the best rates, and it starts with a simple phone call.