In the unpredictable world of driving, accidents can happen to anyone, anytime, anywhere. Irrespective of how safe a driver you are, the unexpected can catch you off guard.
In addition to the immediate physical and emotional upheaval, the significant long-term financial implications of a car accident can include your car insurance rates.
So how much does insurance go up after an accident?
While each insurance company has its own policies, several common elements determine how much your car insurance goes up after an accident.
You can contact a Florida car accident attorney for a rightful lawsuit from the insurance company.
Understanding Car Insurance
Your age, vehicle type, location, and driving record determine your insurance premium. Accidents enter your driving record, causing insurers to reassess your risk profile and potentially increase your insurance rates. Insurance companies have their own policies surrounding how they calculate the cost of car insurance, which may mean that one company charges more than another.
You take out car insurance to reduce your personal liability after a car accident. Thanks to your auto insurance, you can cover the cost of repairing another party's vehicle. Many drivers also carry insurance that protects them if they cause an accident, including collision policies that cover damages to the liable party's vehicle.
Insurance companies, however, do not want to cover someone who frequently causes accidents and may adjust their rates accordingly.
How Accidents Influence Car Insurance Rates
When determining your car insurance premium, insurers consider your driving history.
They primarily examine your past to anticipate the future, assuming that if you have had accidents, you will likely have more in the coming years.
Why Accidents Cause Rates To Increase
An accident indicates a higher risk to the insurance company. If you have been in a car accident, an insurer views you as more likely to make a claim in the future, which could mean having to pay out.
To compensate for this increased risk, it raises your premiums.
A significant accident history, including a large claim or multiple accident claims, can further show an insurance company that it is taking a greater risk in insuring you, which may lead to a steeper increase in your insurance rates.
Your insurance company ultimately exists to make a profit. When it has to pay out for accidents, it misses out on profits.
To improve its financial status and offset that risk, the insurance company passes some of the risk on to you.
The Role of Fault in Accidents and Its Influence on Rates
The influence of an accident on your insurance rates also depends on whether you were at fault. If the insured party was to blame for the accident, their rates would likely increase more significantly than if they were an innocent party who suffered an injury or damages because of someone else's negligent actions.
Even when the insured is not at fault, their rates may still increase, as some insurers consider any accident a risk factor.
Remember that multiple at-fault accidents can signal a dangerous driving history. This may lead to higher rates and make it more difficult for you to get insurance in the future.
An insurance company may also look at the factors that led to the accident. If, for example, the driver chose to drive while distracted, it may indicate that they frequently make unsafe decisions when getting behind the wheel.
Driving while intoxicated can also cause insurance rates to skyrocket, regardless of whether the driver causes an accident. Some insurance companies may even drop drivers altogether for an accident where they were driving under the influence.
The Timeframe in Which Rates Can Increase After an Accident
You may not see an immediate insurance rate increase after an accident. Insurance companies typically adjust premiums at the time of policy renewal.
If your policy renews annually, you might not see a rate increase for several months following an accident, though other insurance companies may send out a higher bill as soon as the next one is due.
The Accident Forgiveness Feature
Some insurance companies offer an accident forgiveness feature. This means they won't increase your premium after the first at-fault accident. This feature, however, is often only available if you have a clean driving record or have been with the insurer for a certain number of years.
An insurance company may also grant accident forgiveness if you cause an accident with minor damage and few or no injuries. If the damage from the accident exceeds the insurance company's threshold, you may have to pay more on your insurance premiums in the future.
How Much Car Insurance Rates Can Go Up After an Accident
The increase in the car insurance premium following an accident depends on:
- The severity of the accident: A minor fender bender might cause insurance rates to increase much less than a major accident. An accident involving significant injuries, meanwhile, might lead to a higher increase than an accident involving only property damage.
- Liability for the accident: Even insurance companies that increase rates regardless of who caused an accident may increase them more if you were at fault than if the other driver caused the collision.
- Your driving history: If you have a clean driving history outside the single accident with no speeding tickets or other strikes against you, the insurance company might raise your rates less than if you had a checkered record with numerous offenses. The insurer may also consider past accidents: if you have not caused accidents in the past or suffered any involvement in an accident, you might see lower rate increases.
- How long you have been with the provider: While an insurance provider may review your long-term driving history regardless of how long you have been with the company, you will usually find that your personal history with the insurance company significantly influences your rate increase after an accident. If you routinely pay your bill on time, have multiple accounts with the insurance provider, and have a good relationship with them, you may see lower rate increases.
- Your geographic location: In some states, insurance costs will increase much more than in others after an accident.
- Your insurance company's policies: Each insurance provider has its own policies and requirements that it uses to determine how much it increases its insurance rates after an accident.
Generally, you can expect an increase of around 40 percent on average. A serious accident or a history of multiple accidents, however, could lead to more dramatic increases.
For instance, if an insurer categorizes an accident as severe, the insurance rate could even double. Depending on the provider's policies, more minor accidents or those in which you are not at fault might result in a smaller or no increase.
Tips to Prevent Rate Increases After an Accident
Here are some steps you can take to prevent a significant rate increase after an accident:
Talk to Your Provider
Communicate openly with your insurance provider. Sometimes, you can negotiate a rate increase, especially if you have a previously flawless driving record. Your insurance provider can offer more information about what you can do to decrease your insurance rates, whether that means decreasing some of your coverage or taking a class designed to help lower your rates. Your provider can also offer information about how long rate increases should continue.
Shop Around
You may need to shop around for a new provider if your rates become unaffordable. Keep in mind, however, that frequent switches could also increase your rates. Get a good idea of what coverages you are comparing as you look at the difference between one provider and the next so you buy the right coverage for your needs.
Take Driving Classes
Some insurance companies allow you to take driving classes that reduce your premiums. You may need to go through a virtual safety class that your insurance provider offers or attend state-sponsored classes designed to remove points from your license after a ticket or accident.
Some states allow you to take virtual courses to remove points from your license, others require you to attend in-person sessions.
How to Recover Financially After a Car Accident
A car accident can put immense strain on your finances. You have car repairs or replacements to consider, medical bills, and increased insurance premiums.
In this instance, personal injury protection (PIP) can cover medical expenses and, in some cases, lost earnings due to the accident. You can also take the following steps to protect your finances following an accident:
Negotiate Medical Bills
Many medical care providers allow you to negotiate your bills, especially after a catastrophic accident. Talk to your care provider's billing department or have your lawyer negotiate on your behalf to make your medical expenses more reasonable.
Check Your Insurance Coverage
Your insurance may cover more than you think after an accident. Your insurance company can help with repairs to your vehicle and medical treatment and may also offer payment for a rental car or even mileage reimbursement.
Your lawyer can review your policy and give you a better idea of what coverage you can expect.
Seek Compensation
If someone else's negligence caused your accident, you can pursue compensation for the damages you sustained, including medical costs, lost earnings, and pain and suffering. While your PIP coverage may cover immediate medical damages in a no-fault state, as your costs go up, you may have the right to file an injury claim.
Discuss your injuries with your attorney to better understand whether you can file a claim and how much compensation you can expect.
Your lawyer can also clearly explain how long it may take to recover compensation.
FAQ
Q: How much does car insurance go up after an accident? A: The increase in car insurance rates after an accident varies depending on factors like fault, severity of the accident, your driving record, and your insurance company's policies. On average, drivers can expect their car insurance premiums to increase by 20-50% after an at-fault accident.Q: Does a no-fault accident affect my car insurance rate? A: While a no-fault accident may have less impact than an at-fault accident, it can still lead to an insurance rate increase. Some insurance companies offer accident forgiveness for your first no-fault accident.Q: What is accident forgiveness coverage? A: Accident forgiveness is a feature offered by some car insurance companies that prevents your insurance rates from increasing after your first at-fault accident. Not all insurance providers offer accident forgiveness, and eligibility requirements may vary.Q: How long does an accident stay on my insurance record? A: Most insurance companies consider accidents as part of your driving record for 3-5 years. However, the exact duration can vary by state and insurance provider.Q: Can I get cheaper car insurance after an accident? A: While your rates may increase after an accident, there are ways to lower your car insurance rate:
Shop around and compare quotes from different insurance companiesTake a defensive driving course for a potential discountAdjust your coverage limits or deductiblesConsider usage-based insurance programs
Ask about available discounts, such as a defensive driver discountMaintain a good credit report, as some insurers use credit information in pricingConsider increasing your deductibleBundle your car insurance with other policies like homeowners or renters insurance
Track Your Expenses
After a car accident, carefully keep track of all expenses you may encounter. This can help you manage your budget and calculate your damages for an injury claim.
Working with a financial services provider can also give you a better idea of how to manage your budget after a serious accident, including making sure that you have provisions in place for the medical care you need.
Hire an Attorney After Your Car Accident
Understanding how a car accident may increase your insurance rates can help you navigate the aftermath of an accident more effectively. Be it a minor accident or a major one, knowing how your insurance works is paramount to managing financial consequences.
Hiring an attorney after an accident ensures that you have somebody knowledgeable and experienced to advocate for your rights. If you have questions about your specific insurance policy, the coverage you should expect, or the compensation you may pursue, a Florida personal injury lawyer can best assist you.
James Wayne Holliday
James Wayne Holliday has been practicing law since 1995. He has been named as a “Best Attorney” Lifetime Charter Member in Florida, an honor awarded to less than one percent of the nation’s lawyers.
Mr. Holliday has earned a reputation as a relentless trial lawyer because of his outstanding work ethic and thorough preparation of his cases for trial.
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