Copyright (c) 2010 Todd Clay
If you have an accident, how much will your insurance premiums be? Well, it all depends on the nature of accident and how your insurance company sees it. Sometimes the rates don’t change. In other situations, the policy is cancelled. Before you answer one of the questions, we must first know how auto insurance works.
How Car Insurance Normally Works
How does insurance work? Drivers who have tickets pay more than people who don’t have tickets. Additionally, people who get claims pay more too. However, safe drivers without tickets pay minimum premiums.
Therefore if you have an at-fault accident and it’s a big claim, the rule is you likely pay more insurance premium. Your policy might be cancelled if you are involved with gross negligence.
When Insurance Rates Don’t Increase After an Accident
However there are exceptions to the rules, a lot of companies forgive minor accidents. Rates do not change if one company pays a minimum claim – say less than $500. It’s also possible to incur a bad accident and your insurance rate will not go up – especially if you’re not at fault.
For example, if you have an accident but are not guilty and don’t make a collision claim, the probability is your insurance company will not know itwhat happened. Then, your rates will not be changed
When Car Insurance Rates Increase
At-fault car accidents normally result in an increase of your insurance premiums. There are higher premiumsbecause the accident will be rated against your coverage. There are many types of insurance coverage that contains collision, personal injury protection, and medical coverage. If you are found ‘at fault’ for the accident, coverage like personal liability and collision will cost you, your vehicle, and personal injury to the other driver. Frequently, if you have only one accident, you will see a raise in your insurance quote.
Let’s say, your insurance are not cancelled after an at-fault accident.. Surcharges are usually 10% on top of normal premiums. You will also get more than one surcharge if you are liable with more than one accident. Surcharges often last 3 years and they are stackable.
It is significant to remember that there are some factors which take into consideration after an accident like your age, gender, and driving record. These factors will have an effect on how high the percentage increase will be.
If you just like to increased premiums after an accident happened, you might be trying to hide the incident. It’s very difficult to hide the accident most especially if you want to shop for a new policy. For purposes of underwriting, a lot of insurance companies ignore the accident if it occurs more than five years ago. No matter how serious it is. A lot of insurance companies fail to notice the three year mark.
When Insurance Companies Don’t Change Rates
An insurance company has no authority to amend your rates mid-term. Rate increase must happen after you renew your contract. If several months pass between the accident and the corresponding rate will increase, you will have more time to find a cheaper insurance company. The only disadvantage is when the new company doesn’t discover your accident. They can even amend your rate later if you hide your accident. The rule is, be honest with your new company if you are shopping because of your pending cancellation.