Pam's Insurance Site

About Me

Pam's Insurance Site

When I bought my first house, I was already going into a lot of debt. I didn't have the money to seriously insure it, so I bought only the bare minimum without consulting an insurance professional. That was a big mistake on my part. It could have turned out alright. That is, if my house hadn't been in the path of a huge storm. Huge gale winds knocked a tree down straight through my roof. My house was practically destroyed, and my minimal policy didn't cover nearly enough. I spent years and years trying to get myself out of that financial mess. Since then, I have always been very cautious in learning about insurance and talking to the real professionals.



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6 Facts About The Relationship Between Auto Insurance And Car Accidents

Getting into a car accident is scary physically and financially, especially if your auto insurance decides to increase your insurance premiums. If you've been in an accident, or you are just curious about what happens after an auto accident, check out these six auto insurance facts.

At-Fault Drivers Usually See Rate Increases

The most likely outcome of any auto accident is that whoever caused the accident is going to see a rate increase in their auto insurance. The reason for this is that your auto carrier sees you as a bigger risk now. One of the factors that goes into determining your auto insurance premium is your driving history, including accidents. Well, now, you have a brand new, recent accident on your driving history, and as far as the insurance carrier is concerned, it means you are more likely to get into another accident and cost them more money.

Rates May Even Increase for Drivers Who Aren't Responsible

When you get into an accident that wasn't your fault, the insurance company may argue you aren't a defensive driver and raise your rates too. They assume that if you don't drive defensively, you're more likely to get into another accident. This doesn't always happen, however. Some carriers allow you to add accident forgiveness to your policy, which forgives your first accident. In some states, it's illegal to raise your rates if you weren't responsible and you file a claim under your comprehensive coverage.

You May Need to Make an Uninsured Motorist Claim

If the at-fault driver doesn't have auto insurance, you may need to file an uninsured motorist claim under your insurance, but you'll only be covered if you actually have uninsured motorist insurance. You may also need to file this claim if you were the victim of a hit and run. Whether or not your insurance premiums will increase depends on your policy and if you live in a state that prohibits rate increases for drivers who weren't at fault.

The Increase Is Determined by the Severity of the Accident

How much your rates increase depends on the severity of the accident. Minor accidents cost the insurance carrier and you little, but major accidents see major rate hikes. For example, if you barely hit the bumper of another car, the damages may not total more than the deductible. In this instance, you and the other driver may not even file a claim. You'll still need to report the accident, but with no claim, there will probably not be a rate increase. However, if you totaled someone's car, that's going to require a claim, and it's going to cost the insurance company and you a lot.

The Insurance Company Will Check Your Driving History

Your driving history also plays a role in your rate increase. If you have a good driving record with few accidents and traffic violations, you may see only a small increase because the insurance carrier knows and has proof that you are usually a good driver. However, if you often have accidents (even if they aren't your fault) or if you have a lot of traffic violations, you may see a bigger increase.

The Increase Is Temporary

You may fear that a rate increase is permanent, but that isn't the case at all. Typically, the increase remains in effect for three years from the day of the increase, but the increase doesn't usually take effect until your policy renews. You may be able to reduce your increase by taking a driving class or increasing your deductible.

No one wants to get into a car accident, and nobody wants to face the financial consequences of one either. You can help protect yourself, however, by being a good driver and getting accident forgiveness. For more information about accident forgiveness or other riders, contact an auto insurance carrier, such as Northeast Insurance Agency, in your area today.