Will My Insurance Premium Skyrocket After An Accident?
No matter how careful you are on the road, there is still a chance that you could end up in a car accident at some point. While being involved in a car accident is a stressful and traumatic event, some of the financial burdens you may experience can be lifted by having car insurance. Your car insurance should help cover damage to all vehicles involved, as well as any property damage or medical costs you would pay out of pocket for without such insurance. The problem is that if you have been seriously injured and choose to file a claim, there is a possibility your rates will increase, even if the accident you were involved in was mild. How large the insurance claim you make will affect your insurance premium depending on: (1) the severity of the accident; (2) who was at fault; (3) the type of claim; (4) discounts you qualify for; and (5) the company you are insured with. Additionally, specific details such as your driving record, claims history, geographic location, and even your age and gender come into play when determining the affects on your insurance premium. On average, young drivers under the age of twenty-five may see the highest increases after a car accident because insurers typically view young drivers as an especially risky group to insure.
In an at-fault accident, where you are the perpetrator of the accident, your car insurance premium would increase because insurers would deem you a higher-risk driver and determine that you are more likely to file claims in the future. This means that such discounts such as claims free or good driver discounts could be lost. The good news is that there are some helpful tips and tricks that can help lower your premium and regain cheaper insurance payments:
- Accident Forgiveness: Individuals can reduce their insurance premium following an accident with accident forgiveness. It is always important to inquire about an insurer’s accident forgiveness policy when shopping for car insurance.
- Traffic School: Most insurers will forgive drivers with a history of accidents if they can complete a traffic school course. In order to satisfy the requirements necessary for a reduction of rates, you must enroll in an approved defensive driving course in your state.
- Minor Claims: It is imperative that a claim is filed
- Credit Score: Individuals with scores above 600 typically receive better premium offers. While it takes time to build your credit score, it can also help you avoid paying high-interest rates. Stay within your spending budget, pay debts and address any discrepancies on your credit report to improve your credit standing.
- Deductibles: Insurance deductibles and premiums are inversely proportional. A lower deductible can result in a higher premium, whereas, on the opposite side of the spectrum, a higher deductible results in a lower premium. After an at-fault car accident, you should consider increasing your deductible to reduce your annual premium—keeping in mind that if you raise your deductible, your out-of-pocket expenses would be higher if you were to file a claim. For minor accidents, paying out-of-pocket may be doable. But ensuring your deductible is manageable will prevent financial issues in the event of a large accident.
Even if you do not qualify for programs like accident forgiveness, there are alternative ways to lower your premium. Consult your insurance agent first before pursuing a claim to discuss the best possible options for you. After that, if you are still unsure where to start, the following methods could help save you money post-accident:
- Look for discounts: Most car insurance companies offer a variety of discounts, including good student discounts and multi-policy discounts. Many also offer usage-based telematics programs that monitor your driving in real time and award discounts for safe practices behind the wheel, such as following posted speed limits and your braking patterns.
- Shop around: It’s always a great idea to shop around when your policy is up for renewal to find the best prices currently being offered from different car insurance companies. It may be difficult to find a car insurance policy that offers the same coverage at the same price you were paying prior to an at-fault accident, but you may also discover that other insurance companies offer different discounts and coverage options.
- Update your coverage choices: If you absolutely need to lower your insurance premium, you could consider changing your coverage options. Although you should always review these changes with a licensed agent, lowering the amount of insurance you have could lower your premium. You will still need to maintain your state’s minimum required coverage levels, and, if you have a loan or lease, you may need to keep full coverage on your vehicle, which includes comprehensive and collision, but you might be able to trim optional coverage selections.
- Consider a different car: The make and model of every vehicle is rated differently by insurance companies and it costs more to insure more expensive vehicles. This comes down to safety ratings, materials, cost of repair and many other factors. If you need to cut down the cost of your car insurance policy, consider getting one of these cheap-to-insure options
By using one or more of these strategies, you could help lower the sting of higher rates after an accident. If you still feel that pursuing a claim is your best course of action to help get yourself on a track similar to pre-accident, consider speaking to a lawyer at KI in order to ensure that you are protecting your legal rights to compensation as comprehensively as possible.
*PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME*
This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team.
KI Legal Personal Injury fights for victims of a wide array of personal injury claims, from Motor Vehicle Accidents to Scaffolding and Ladder Falls to Slip/Trip & Falls, amongst others. By leveraging its multidisciplinary foundation and, with the help of its experienced litigators, KI Legal Personal Injury can fight for the results and compensation that victims deserve without pushing for premature settlements due to financial reasons. This financial paradigm shift swings the pendulum in our favor when it comes to negotiating with insurance carriers, inherently leading to better results for clients. For the latest updates.