For most people, the first thought after a car accident is not about the impending ticket or even the damage to the vehicles involved. Assuming there is no serious injury involved, most people think instantly about their car insurance rates. Will their rates go through the roof as a result of the accident? This is an especially big concern if they happen to be at-fault in the accident. It is of course true that your car insurance will increase in most cases when your risk profile goes up. Being involved in an accident can tend to signal to insurance provides that you are a riskier bet. Just how much your insurance jumps will depend on the particulars of your situation.
Do you have accident forgiveness?
The first question you have to ask is about accident forgiveness. Do you have it of not? Some insurance providers, including Allstate, provide a program where your rates won’t go up after you report the first accident. This kind of deal is typically on available if you have insurance that requires a slightly higher monthly premium. It can look like a great deal when you first get into an accident, though.
How much is your rate based on a record of safe driving?
Determining how much your insurance might rise is all about understanding the dynamics that drive your particular risk profile. Some people have had many accidents and tickets. For them, another accident is unlikely to make their rates rise too much. Their poor driving record is already baked into the rate, so to speak, so they have little to worry about in that regard.
However, if you have a low rate on the basis of a mostly clean driving record, then you may have more to worry about. People who have avoided tickets and wrecks for two or three years may have the lowest possible rates because the insurance company has decided that they present little to no risk. In this instance, you can expect your rates to jump by around 50% as a result of your accident. Your risk profile and policy utilization scores will go up, causing the insurance provider to re-calibrate.
The nature of the accident matters
A fender bender that causes $1,000 of damage to another car will likely have only a small effect on your insurance rates, pushing them up 20% at most. However, a drunk driving accident in which you injure another person will have a massive impact on your rates, tripling them in some cases. For people involved in those kinds of accidents, it may be necessary to get what is called SR-22 insurance coverage. This insurance is specifically made for drunk drivers and other drivers that present a high risk. If your accident included alcohol or caused a significant amount of damage, then your insurer could require you to take on this important distinction, pushing your insurance cost to somewhere around $5,000 per year. You can do the math in comparison to your current annual rate.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!