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Your Guide to Post-Accident Insurance Increases
You’ve been in an accident, and no one was seriously injured. From there, most people’s minds jump straight to the financial fallout. How much will it take to get their car repaired? And how much will their insurance premium go up?
After an accident, people automatically assume their insurance carrier will increase their rates. While this is often the case, it is not always true. Insurance companies will assess several factors when determining the effect of an accident on a driver’s premium. Considerations include who was at fault for the accident, the severity of the collision, and the driver’s record.
Some insurers offer accident forgiveness programs, but they often cost an extra fee or require loyalty to the insurer for several years. It’s worth looking into your insurer’s offering and finding out what’s available to you. Under this type of program, your insurer will generally forgive one accident every few years without a rate increase. But beware — while your insurance company has decided to disregard the accident, future providers may not.
When rates after an accident increase, Bankrate.com found the average annual amount is $637. Though that’s not peanuts, an extra $50 a month may not be as bad as you feared. You can also try to mitigate your losses by shopping around to other insurance providers, researching additional discounts, or considering a higher deductible on your policy.
While a rate increase can feel punitive, it’s just good business. Insurance carriers assess the risk of every individual they insure and determine a premium accordingly. Being in an accident makes you a higher risk to insurers, who will need to pay out for your mistakes — nothing personal.
Though a rate increase is a setback, it thankfully won’t last forever. Most accidents only stay on your record for three to five years. If you’ve been a safe driver during that time, your rate should go back down. Higher insurance premiums are one of the many risks we assume by getting behind the wheel of a car. Remember: driving is a privilege, a vehicle is not a toy, and there are far worse accident outcomes.