A car accident can be traumatic, and higher insurance rates later make things worse. Your rates will eventually go back down if you avoid future accidents, but this usually takes a few years. Here’s what you need to know about how long an accident affects your auto insurance rates and what you can do to save money.
How long does an accident affect your auto insurance rate?
An accident typically affects your car insurance rates for three to five years, depending on the insurance company and state regulations, as well as the nature and severity of the accident.
Most insurance companies increase your premium after an accident you cause. The practice is known as surcharging, and how it’s done varies by company and state .
Some states, including arizona, new york and ohio, only allow insurance companies to charge surcharges for at-fault accidents. Other states give insurance companies discretion to collect a premium for an accident you did not cause.
The surcharge appears on your statement as an additional charge, often as a percentage of your premium, when you renew your policy after the attributable accident. You may see a higher surcharge for a major accident than a minor one.
If your insurance company previously gave you a no-claims or no-accident discount, removing this discount after an accident may compound your rate increase.
Insurance companies typically apply surcharges for three years, but you can ask your agent or the insurance company to make sure.
When you buy insurance after an attributable accident, the companies that provide quotes will learn about the accident from the databases they use to check your claims history and motor vehicle records.
Insurance companies typically consider claims and violations from the last three years when calculating your rate for a quote or application. however, some companies go back five years or more .
how can you lower your insurance rates after an accident?
Surcharges typically remain on your insurance bill for three years, but there are steps you can take to lower your auto insurance rates after an accident. These may not fully offset the surcharge, but they can take some pressure off your wallet.
Charging practices vary by company. Some offer lower rates to drivers in accidents than others or charge certain types of accidents at lower rates. The best way to find out if you can get a better deal is to compare quotes from multiple companies.
quotes are free and do not require a purchase. You’ll get the most accurate quotes when you’re honest about your claim history and driving records.
adjust your coverage
You don’t want to drop essential coverage to lower your insurance rates after an accident, but you can save a little money by increasing your collision and/or comprehensive deductibles.
You can also ask your agent or company about potential discounts you may have overlooked in the past. Here are a few to check out:
- Usage Based Insurance (ubi): Many companies offer a discount just for signing up for their ubi program, which typically tracks and rates your driving practices through your smartphone . you can save more by maintaining a good driving score.
- low mileage discounts: If you no longer travel to work as much as you did when you started your policy, let your insurance company know. you may qualify for a low mileage discount.
- Bundling: If you’re not already taking advantage of the multi-policy discounts most companies offer for bundling your auto insurance with other policies, now may be a good time to consolidate your insurance with a single company.
consider accident forgiveness
Many companies offer an optional accident forgiveness benefit that protects you from late fees after an accident. You cannot apply this benefit retroactively, but it may be useful in the future.
Specific terms vary by company. You are generally eligible for accident forgiveness after being accident-free for a specified period, often three or five years.
Do all accidents show up on your driving record?
Due to state laws and insurance company reporting requirements, most accidents end up on your driving record in one way or another, but they don’t always affect your insurance rates.
Most states require you to report an accident to law enforcement when it results in property damage over a specified dollar value or injury. Once there is a report, usually ends up in your motor vehicle records.
Insurance companies often require you to immediately report an accident so that your policy will cover any costs that may result from it. When you open a claim, it is also reported to the Comprehensive Loss Underwriting Exchange (HINT), a widely used industry database.
When it comes to accidents, insurance companies generally focus on those you caused and/or were cited for a traffic violation. if you see a rate increase after an accident that you did not cause, you may be able to get a better rate by looking for a company that only charges surcharges for at-fault accidents.
If you’re deciding between filing a claim with your insurance company or paying for damages yourself, it’s usually best to contact your insurance company as soon as possible. In this situation, you should inform the insurance company that you are only inquiring about the process and not formally opening a claim. This way, the incident will only be entered on your driving record if you subsequently do so. . decide to file a claim.
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