If you have not had any accident for some time you are probably enjoying cheap rates. When you make a claim for a stolen auto, an accident or other damages you will lose these discounts and your premium will go up. Car Insurance rate increase due to a claim will depend on how big was the claim, was this first incident, how old you are and which company you are insured with. But there are ways reduce the affects of these unfortunate incidents. So, here is how to lower insurance after accident or other claims.
Ways to Minimize Effects of Possible Claims on Car Insurance Rates
Before we go into how you could control premium increases after accidents we should discuss ways to make sure next claim will not overly affect your vehicle insurance premium.
Accident Forgiveness: If you are qualified for accident forgiveness it would be a good idea to make sure you have that in your current policy. Usually, companies only offer this to drivers with 4 or 5 years no claims. This should not cost a lot of money and in most cases you can get it added to your policy free as a reward. If your insurer doesn’t offer you this service, you should consider switching vehicle insurers.
When you have accident forgiveness your insurer agrees to ignore your next claim when calculating your renewal premium after a crash. So, having such provision in your policy would mean that you will see no premium hikes for the next accident.
Small Claims: Your premium increase may be limited if it is your only claim for some time. However, rates can go up a lot if this is the second or third claim no matter how small they were. The following link provides answers to how much does your insurance go up after an accident? Therefore, it may be a smart idea not to claim for every small thing. In that case, you may be able to get away with no increase as discussed above or see slight rate hike when you have to make a claim next time. Remember that you get paid when you don’t make a claim as well in the form of discounts.
How to Get Cheap Car Insurance for People with Accidents
If you have to make a claim and have no accident forgiveness you will need to try other ways to find cheap auto insurance after accident. Here are several alternative solutions.
No Fault Accidents: If another driver was responsible for the crash you may be able to claim on third party insurers. In that case, it wouldn’t go down as a claim in your policy. You need to be active to successfully claim on the third party insurer. First of all, you need to document clearly and support it with witness statements or police accident report that the other driver was at fault. Secondly, you need to chase up the claim for quick settlement. Your auto insurance shouldn’t go up after a no fault accident when your damages are paid by a third party insurers.
Pay off Auto Loans: If you have an auto loan that you can pay off this would reduce the coverage you have to buy. For example, you wouldn’t need GAP auto insurance anymore and increase your deductibles as much as you want when you own the car outright.
Increase Deductibles: One of the ways to reduce car insurance premiums is to take more risk yourself by increasing deductibles. This tells insurers that you will take extra care from now onward. Accepting to pay more from your pocket would mean that you will lose more if you make a claim. You just have to make sure that you don’t set too high deductibles. Remember, this is the amount you have to pay out of own pocket if you make a claim before the rest of the damages is paid by the insurer.
Buy Standard Policies: If you had a few extras and customizations on your previous policy you probably paid a little more for it. This may be time to go for a standard policy to bring down auto insurance rates after a claim. Costs of additional coverage may be negligible for good drivers. But they will be high with bad driving history since your base rate will go up following the accident.
Consider Drivers: Another way of cutting costs is to limit the people who can drive your car. You may be able to exclude bad drivers in your household providing they have access to another vehicle and insured elsewhere. Also, you may limit the coverage to listed drivers only or drivers over the age of 25. It may be a good way of reducing car insurance costs if it brings your premium down and you can restrict who can drive the insured automobile.
Pay Premium in Full: Paying premium in full generally saves any interest and credit arrangement fees associated with paying monthly. Also, some companies offer extra 5% discount for paying the premium in full. This is a strategy you can use regardless of your circumstances. It is an easy and quick way of saving money.
Shop Around: Your auto insurer is not the only one in the market. You may not have to put up with significant premium increase after a small claim because you can get more competitively priced policy following an accident even it was your fault. You normally have a good chance of saving money if you browse for car insurance online. This chance would increase when premium goes up. If you can get 15% discounts on $1,000 premium, it would be $150. But the same percentage of discount would result in $225 savings when the premium is $1,500.
Switching Auto Insurance after Accident
This would be a good chance for you to find out how competitive your current insurer is. Many people don’t shop around for a long time unless they see a change in their premiums. Policyholders can still save good money by switching vehicle insurance after accident. You just have to try and see how much you can save.
As demonstrated above there are ways to lower automobile insurance for people with accidents on their records. When you are a good driver and getting affordable rates you may not have paid much attention to them. Now that your premium is taking a larger chunk off your budget it is a good time to consider all the options. Explore these avenues and see if you can reduce the pain of a high premium due to claims.