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What Happens To Your Insurance After a Car Accident?

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There are a few things that can ruin your day, like a car accident. No matter if you have a minor fender bender or a more serious accident, the ramifications can be significant. A car accident might only last a few seconds. However, the aftermath can be felt for years. No matter the circumstances of the accident, your insurance rate could be greatly impacted. An at-fault accident could affect your rates for up to five years, depending on where you live.

With over 5 million car accidents in the United States each year, states have taken steps to ensure that drivers are protected. The majority of states have laws that require all drivers to carry a minimum amount of liability insurance. Liability coverage will pay for bodily injury and property damage claims made by other divers if you are at fault in an accident. This coverage will not pay for you or your car, however. As a result, many drivers choose to purchase full-coverage policies that include collision and comprehensive benefits. If you are at fault for an accident, you could see rates for these policies increase by as much as 50 percent.

An at-fault accident will go on your driving record and make it difficult to get lower insurance rates for some time. Fortunately, not all accidents will impact your insurance in the same way. Some policyholders who have accident forgiveness policies may not even see increased rates after a minor accident. If you are hit with higher rates after an accident, there may be some things that you can do. Let’s look at what happens to your insurance after a car accident.

How does an accident impact car insurance?

If you are at fault in an accident, your insurance rates will most likely increase when it comes time to renew your policy. To be found at fault for an accident, you must be more than 50 percent responsible. For your insurance to be impacted, the accident must have caused damage to someone’s property, caused bodily injury, or both. After an accident, your insurance company will see you as a higher-risk driver for a time and make adjustments to your account. So, can your insurance company drop you after accident? While this is rare, in some cases, your insurer may choose to cancel your policy if you have had multiple claims and your risk is considered to be too high.

The severity of your car accident and the resulting claim will have an impact on your insurance rates. For example, a minor parking lot bump-up usually won’t have the same impact as if you rear-ended someone on the highway. In some states, you may see no rate increases for claims under $1,000. In general, however, your rates could increase as much as 65 percent, depending on where you live and your insurance company.

How can you lower insurance rates after an accident?

As discussed, after an accident, your insurance rates will increase. This surcharge could last anywhere from 3-5 years. During this time, however, there are a few things that you can do to help lower your rates. The first thing that you should try to do is maintain a clean driving record. Without any further incidents, your rates will return to normal as soon as possible. Additionally, you could also seek out discounts offered by various insurers. Bundling your policies, signing up for automatic bill pay, and enrolling in online services are common ways to get a discount on your insurance premiums. Aside from this, you might also choose to compare rates and coverages from other insurers to see if you can find a lower premium with another company.

Insurance companies consider several factors when determining policy rates. An at-fault accident will increase your rates for some time. However, safe driving, policy discounts, and comparison shopping might help to lower your rates even after an accident.

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