How Car Accidents Can Affect Insurance Rates
The loud crunch of another fender bender is the last thing you need to hear as you wonder how your insurance rates will rise after you submit another claim to your insurance company. Your next thought is probably: how long will this follow me? These questions don’t often have simple answers, but with a few guidance points, you’ll be informed and be able to make the right decisions when it comes to your car insurance.
What is an Accident
Many of us have a definite idea of what an accident is – contact by one moving vehicle with another resulting in damage – and believe our insurance company probably has the same definition. However, some companies define accidents in more legal terms such as qualifying events that result in damage of more than a certain amount of money in addition to the insured, namely you or any person on your insurance policy, being at fault. In some cases, your insurance company will not count an accident of any amount against you if the other driver or drivers are deemed to be legally at fault. Consult your insurance policy or speak to your insurance agent regarding the details of your individual insurance policy.
When to File A Claim
Often, if the accident seems small, there is an inclination not to file a claim so your rates don’t even have the possibility of rising. However, no matter the amount of damage that you see, filing a claim is a good idea in case there is serious mechanical damage under the hood which can total in the thousands. Your insurance company will be better equipped to defend you against any claim by the other person if they’re informed immediately and are provided all the details of your accident.
Whether Your Rates Will Rise
While there is never any guarantee that your rates will rise or stay the same, it is more likely than not, your car insurance rates will rise the more claims you file. Undoubtedly, the more accident-prone you are, the higher your insurance rates will be as more accidents cost the insurance company more money. Depending on the type of accident, some estimates have pegged rate increase as high as 33%.
Your age and types of accidents also have a significant influence in your risk profile as the riskier you are deemed to be as a client, the more money you will be charged for the same insurance product as another, less risky client. Additionally, regardless of insurer, accidents will be noted for three years, even if you switch insurance companies.
Having no car accidents is the best marker for your risk profile, but sometimes life gets in the way. Knowing how accidents impact you and your risk profile, and what you can do to mitigate a rate increase, is the best way to help head off larger and larger insurance bills. As with any contract, read it thoroughly or speak to your insurance agent to better know how any accidents will affect your car insurance rates.
Costa Ivone, LLC
311 N Aberdeen St #100B, Chicago, IL 60607