How Does A Car Accident Affect Insurance Rate?

By: Randolph Summitt Click author's name for more of his/her articles

To understand how a car accident affect insurance rate, you have to first understand the basics of how insurance rates are determined.

When you sign up for an insurance policy, the insurance company will determine your risk level based on a few factors. These factors will include your age, since very young or very old drivers statistically are involved in more accidents than other drivers. It will also include your history of previous accidents.

If you are therefore involved in an accident, depending on the factors discussed below, they might decide that you are a higher accident risk than initially estimated, and therefore increase your insurance premiums.

The factors they will take into account when determining whether or not your insurance premiums should be increased are the following:

If you were involved in a number of accidents over a short period of time, your premiums are likely to be increased drastically

Being at fault in an accident will usually result in a premium increase. This will be determined by the police report

If there is no police report available, a witness report will be used as evidence

If there were two drivers involved, and they were both at fault, insurance premiums for both of them will most likely be increased

If only one driver was involved, for example you drove into a parked vehicle or a concrete wall, you will be held responsible for the accident, and your insurance premiums will probably be increased

In the case where no injuries resulted from the accident, it is less likely that you insurance rates will be increased after such an accident.

Should you be involved with a collision with an emergency vehicle, and that vehicle was speeding to get to an emergency scene, it is not very likely that your insurance premiums will be increased as a result of the accident.

Something to remember is that if you are involved in an accident and found to have been under the influence of alcohol or drugs, not only will your insurance premiums be drastically increased, but you are also likely to face criminal charges

Very often insurance carriers will not increase your premiums if the amount involved is very small. Generally this is considered to be below $750, but that differs from insurance company to insurance company. Make 100% sure you are aware of their policy in this regard before signing up for a policy with a particular company. Sometimes you might be involved in a minor accident, where the damage is only a few dollars. In this case it will be very frustrating if your insurance carrier should increase the monthly premiums.

There are other factors playing a role as well, such as road conditions, the weather at the time, and the condition of your vehicle. As an example, if you never have your car serviced, and as a result the brakes are virtually not working, the windscreen is cracked and the tires are worn, you will find it hard to explain why your premiums should not be increased after an accident. A regularly services, road-worthy vehicle on the other hand will contribute to the perception that you are a safe driver, and not a high accident risk

The above mentioned are the most important factors having an effect on how a car accident affect insurance rate.

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