How Car Accident History Affects Insurance Rates

Nobody likes to be a part of a car accident, but they can happen anytime and to anyone. While they are quite stressful, it’s normal for people to think about what comes next, especially in terms of car insurance.

After all, the last thing you wish is for one unfortunate incident to cause a long-term financial crisis. And when an accident happens, questions like how much insurance will increase and for how long always pop up in a person’s mind.

So today, we’ll cover all about how car accident history affects insurance rates. Let’s begin!

Car Accidents’ Impact On Your Insurance

Whenever an accident occurs, insurance companies find out whose fault it was. This plays a significant role in determining whether your insurance rates will change and by how much. And if it’s your fault, you will possibly face increases in insurance rates.

However, if you were not at fault, it won’t affect your rates, but it will still be recorded in your history. Your insurance provider will also review statements and verify claim details for further confirmation.

Remember that most insurers consider an at-fault accident to be a “big violation,” so they will raise your premium according to that. However, the exact amount relies on the severity of the property damage or whether anyone was injured.

Factors That Go Into Determining Post-Accident Insurance Premiums

Different factors contribute to determining specific post-accident insurance premiums. Let’s have a look at each of them:

• At-Fault Accidents & Your Premiums

If you were at fault for the accident, your premiums will most likely rise. It’s because you will be held responsible for it, and your insurer will have to pay out claims from other passengers or drivers. Consequently, they will recoup those costs by increasing the rates. In some scenarios, your premium may escalate by hundreds of dollars a year, depending on the accident’s severity.

• The Type of Accident That Occurred

Another crucial factor that impacts accidental insurance premiums is the kind of accident that happened. For instance, if there were no damage to property or no injuries aside from car damage (such as hitting the car), then insurers may see this as less risky compared to the type of accidents where there was extensive property damage (like hitting another vehicle) or bodily injuries. This type of accident leads to smaller rate increases than serious accidents.

• The Extent of Coverage You Currently Have