An at fault accident is the primary tell sign that there is something wrong with a person’s driving. Do all auto insurance companies share the same view or some may be more forgiving after just one incident? This and many similar questions have been dissected below in order to figure out the effects of various types and number of collisions on rates. Hopefully, you will appreciate the causes and consequences a lot better at the end.
In 2013, total cost of vehicle accidents in the US was $871 billion, which equates to more than 6% of the gross domestic product, according to Insurance Information Institute. That equates to almost $3000 for each person in the country. Someone has got to pay for it. Of course, the cost is born by the whole society, including local and federal governments, companies and policyholders. It is only fair that drivers who caused damages start paying a little bit more for automobile insurance.
How Much Do Premiums Go Up following an Accident?
After a sizable claim due to a traffic incident in which you were at fault you may see premium increases as much as %50 with some companies. Many of them have already moved away from traditional pricing where they placed significant weight on driving records. Today, most of them use financial indicators as well when they are trying to assess the risk levels.
If you this is the first claim for a long time, have good driving history with no traffic violation ticket and it is not large you may only see slight increase on vehicle insurance, depending on the carrier. They look at past but this is mainly because they want to predict the future. With those credentials there would be several who would predict that you wouldn’t have another incident any time soon and take a chance on you. If the current carrier doesn’t take this view you should get a few other quotes and see who would.
The answer to how much does insurance go up after a collision mainly depends on the size of losses and who was at fault. Small ones are known to be treated leniently compared to larger ones. Severity of the crash and costs are probably the most important factors in rate rises, along with who was responsible. A small scratch caused by vandals is never the same as a full blown head-on collision you caused.
According to an article published on CBS News site, a single at fault accident claim of over $2,000 result in 41% premium increase on average. This translates to a median figure of $345, considering a typical US car insurance policy costs $841 a year. Drivers who make 2 claims in one year can see 93% rate hike.
Also, there are large differences among states. A traffic injury claim over $2,000 can reflect on rates as follows;
5 states with the largest average premium increase after a bodily injury claim:
These 5 states had the smallest average premium increase after a bodily injury claim:
- Maryland: 22%
- Michigan: 25%
- Montana: 27%
- Oklahoma: 27%
- Mississippi: 28%
It appears, states that don’t allow financial factors like credit score to be taken into account see the largest jump. This is mainly because vehicle insurers have to heavily rely on driving records in these states whereas they can look at other factors and try to see if you are more stable or out of control to a point that you will go on a spree in others.
The highest possible price rise would be for a claim following a vehicular collision in which you were 100% at fault and you received a ticket from police as a result of it.
The general consensus is that no fault incidents shouldn’t affect rates. You may have to make claims due to events out of your control. They will still count and you will see their influence but it may not be as scary as you think. For example, a comprehensive glass damage may have no affect on the next renewal quote. A small collision claim you had to make because of someone hitting your parked car may be ignored if the costs can be collected from third parties or push the price little up if it was hit and run.
How Much Does Insurance Go Up after a Minor Accident?
This question is partly answered already above. General view is that small fender bender in a supermarket car park shouldn’t worry an underwriter much if you otherwise have a long and clean driving history. Largely accepted threshold that determines if a collision is minor or large appears to be $2,000. Actually, $2,000 is small enough for many people to pay out of pocket, especially in view of deductible. This may be the best solution to keep a record clean.
Effects of Several Small Claims on Car Insurance
However, recently people complain about non-renewals after a small damage. This happens when you have already had several others and the last loss was the last straw that broke the camel’s back. This brings us to the next issue of how was the records before the last crash. If it was admirable you may still get away with a slight uptick after one case. As mentioned above you may see a huge price change if it was another one in the series of claims you have been making.
What Is an Unreasonable Insurance Increase After an Accident?
As you can see there are a lot of factors to consider before a new quote can be determined. Also, you have alternative options if you see a large price jump. Each underwriter has a different view of the same event and interpretation of exposures. Things are a lot more complicated now with all the additional factors considered these days.
If it is allowed in the state, many companies look at financial indicators like credit scores, marital status, homeownership and job titles along with driving records. Therefore, if you see a large increase after one claim you should check others to see if other indicators will counteract against it. The current carrier may have offered you large savings for clean history. This would be great and you would enjoy those low auto insurance rates as long as you have no incident to report. As soon as you have one you would lose them. You should now look for companies that don’t rely heavily on past experience and offer large discounts for the characteristics you have like homeownership and good credit.
How Does Accident Forgiveness Work after the First Incident?
If you have accident forgiveness coverage one at fault crash may not affect renewals at all. It is bought for exactly this reason. When you have a clean history you want to protect it just in case you may have one unlucky fender bender. Then, they would note the crash on the record but have already promised not to increase the premium after only one. Check if you have this coverage. If you don’t have it after 5 years of loyalty or cannot buy at a cheap price it is high time you should switch because it is a very valuable provision that simply wipes away one error and saves you thousands of dollars in the near future.