Accidents and Your Car Insurance

Having survived a car wreck, you're thankful to be alive. Of course, you'll probably still have questions about what the future holds. In addition to facing challenges like recovering from injuries and potentially going to court, you have to consider what your car accident or crash might mean for your auto insurance.

How Will Experiencing a Car Accident or Crash Impact Your Car Insurance?

Most people assume that their auto insurance premiums will automatically rise after they get into a wreck. In reality, policies aren't always so straightforward.

Insurance rates reflect your risk as a driver. In some situations, the fact that you got into a wreck might not be indicative of whether you're likely to file future claims, so your insurer won't hike your premiums. It all depends on the nature of your crash and your coverage.

Is Accident Forgiveness a Factor?

Your policy provider may offer a feature known as accident forgiveness. Although your accident will remain on your driving record, the insurer won't use it to calculate your future premiums. Your future insurers, however, don't have to honor the same terms.

You might end up paying more for such coverage in the first place. Some insurers only extend accident forgiveness to their most loyal customers and those who maintain immaculate records.

What Role Does Accident Fault Play?

The nature of your insurance coverage impacts who pays for the losses and whether your provider raises your rates. With liability policies, your insurance company must pay to mitigate the costs of the other party's injuries or personal property damages if you were at fault for the accident. When your insurer raises your rates based on your actions, the increase is known as a surcharge.

The majority of car insurance companies add surcharges after you cause a wreck. In places like New York and Massachusetts, rate increases for accidents where you're found to be at-fault can remain on your premiums for three to five years. Depending on timing and your locale's rules, insurers may not be able to waive these surcharges when you sign up for a new policy.

States like Florida, California and others also institute contributory fault laws. These statutes allow more than one party to be deemed at fault for an accident. If a third party filed a claim against your policy after being victimized by your crash, then your rates might increase.

A good rule of thumb for determining whether your insurer will likely raise your premiums is whether you were found to be more than 50 percent responsible for the wreck. Check your policy to see how its terms mesh with your state's laws.

Excluded Collisions

Your locale may prohibit auto insurance providers from raising your rates following certain car accidents. If you live in a place like Pennsylvania, where collisions with wildlife are extremely common, for example, hitting a deer is legally held to be a not-at-fault event. As a result, your insurer can't institute a surcharge after you file a claim for such a car accident or crash.

Potential Loss of Discount Eligibility

Many policyholders enjoy safe driving discounts for having clean records. If you get into a wreck, however, you're likely to lose these benefits. Your loss of discounts is distinct from any accident surcharge that your insurer decides to impose, so your rates might rise more than you expected.

What Effect Do Your Actions Have After the Accident?

Are you struggling with the prospect of paying more for your car insurance because of a wreck? You may have other options. For example, Massachusetts motorists can appeal the surcharges that their insurers impose in cases where they don't believe they were more than 50 percent at-fault for an accident. It's critical to understand what protections you're afforded under your state's rules and exercise them to the fullest.

Seeking alternate coverage is one of the simplest ways to deal with rate increases. Regardless of whether your state's insurers must impose surcharges for drivers who get into car accidents and crashes, finding a company with lower initial premiums could decrease your total financial burden.