Insurance Rates After Accidents

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Car accidents are on the rise. Despite new technology designed to make driving safer, there are also more distractions than ever before thanks to smartphones, and we are all under more pressure to get places faster. Our country is also filled with an aging population and outdated infrastructure that makes driving a risky business. It’s no wonder that accidents occur more frequently these days.

If you’ve been involved in a car accident, you have immediate concerns to address about your physical health and your car’s condition. What you may not think about, though, is the long-term consequences of the accident, such as how it will affect your insurance rates. At Advantage Collision, we’ve done some research to help you understand how accidents affect insurance rates.

No-Fault vs. At-Fault Accidents

If the car accident you’ve been involved in was not your fault, then your insurance rates will not increase after the accident. If you are at fault for the accident, however, then your insurance rates will most definitely rise if you file a claim.

Types of Claims

The amount that your insurance rate increases after a car accident depends on the type of claim you file. There are three types of claims you can file after an accident: property damage, a comprehensive claim, and bodily injury. The rise in your insurance claim corresponds to the type of claim, with a comprehensive claim being more expensive than a property claim, and a bodily claim being the most expensive.

State to State

How much your insurance rate, or premium, will increase after an accident largely depends on where you live. In Massachusetts, for example, filing one claim can increase your premium by 76%, but in Maryland, it would only be a 22% increase. States that have stricter insurance regulations tend to see the highest increases in premiums after accidents. These states include, but are not limited to, California, Minnesota, Massachusetts, New Jersey, and North Carolina. The states with less stringent insurance regulations, such as Montana, Michigan, Oklahoma, Mississippi, and Maryland have lower premium increases.

Length of Increase

As depressing as it is to know that your insurance rate will increase after your car accident, you can take comfort in knowing that your premium rate won’t stay that high forever. Premium increases from accidents that are on your driving record usually last three to five years. After that time, your premium should start to lower down to the rate it was before the filing of your claim.

How to Lower Your Rate After an Accident

If you’ve caused an accident, you may wonder if there is anything you can do to avoid a rate increase. Though you probably will end up paying more for insurance each month, you can help yourself avoid further financial hardship with the following tips:
• Be sure to tell the insurance company about the accident. As tempting as it is to keep your insurance company in the dark, doing so may cost you more if the other driver decides to sue you. If you haven’t told your insurance company and the other party takes legal action, then your insurance may not honor the policy, and you will be left with the entire cost, not to mention legal fees.
• Take a driver’s education class. When it’s time to renew your policy, the insurance company may be more lenient if you’ve shown initiative in becoming a safer driver.
• Shop around for other policies if you are not satisfied with the renewal rates offered by your insurance company.

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