Accidents Affect Car Insurance

Car accidents are scary because of the potential of injury,  loss of a vehicle and the possibility of higher insurance rates. But it may be more difficult to tell how accidents affect car insurance rates than most consumers realize.

A popular myth that one car accident will force an increase in higher premiums is untrue, according to insurance industry underwriters. A single accident will not automatically raise insurance premiums. The reason accidents don’t always affect your insurance rate is that insurance companies understand that accidents are not always your fault.



Insurers want your business and they will forgive accidents in order to keep it sometimes. Forgiving an accident means that your insurance rates will not be raised. But insurance companies will not forgive every accident. There are certain situations in which an insurer will forgive or overlook an accident.

When Companies will Forgive an Accident

• When the accident is clearly not your fault, when a car rear ends your vehicle while you are sitting at a red light for example.
• When you have not had another accident for a long time.
• When the other driver receives a ticket or criminal charges because of the accident.
• If the other driver is clearly responsible for the accident.
• If the other driver has a really bad driving record.

That being said there are some situations when insurers will not forgive an accident.



Insurers will not overlook an Accident When

• A ticket or a criminal charge is issued because of the accident.
• If you are driving without a license or on a suspended license.
• The other driver can prove that the accident is clearly your fault.
• An accident results in a claim to your insurance company. Even claims that are not paid might increase your rate.
• If you get in more than one accident in a specific period of time, usually one year.

Many insurance companies follow what might be called the one accident rule. That is they will forgive the occasional accident say once every few years. Insurers do this because they understand the odds, which say the average person will get in an accident about once every 10 years.If you haven’t gotten into an accident in many years and you get into one it will probably not affect your premium.

However,  the one accident rule will not apply if the accident is your fault or you end up facing criminal charges because of it. The one accident rule may not comply if a claim is made against your insurance company. That means a car accident will not automatically raise your car insurance premium. If an accident does raise your premium it is time to start getting quotes for a new policy.