There are a huge number of different factors that are taken into account when calculating a premium for car insurance. Everything from the make of a vehicle to how old it is plays a critical role. In addition, another factor that is critical to the calculation of premiums is whether or not the applicant has been in an accident or accidents before. Hence, many people wonder about whether their car insurance payments will go up after an accident. This article will explore all of the details regarding such a query.
The short answer regarding whether or not car insurance premiums will increase after an accident is yes. If an applicant for insurance is found to have made a claim regarding an accident in the past, they will have their premiums calculated to be higher than someone who hasn’t been in an accident before. Statistically, this is because, from the insurer’s point of view, those that have had an accident in the past are at a higher risk of making a claim than someone who hasn’t had an accident before. Thus, if someone has been involved in a situation such as a car crash, they can expect premiums to go up.
However, there is a lot more that needs to be considered when looking into the question of whether car insurance premiums will increase after an accident. Although premiums will certainly increase when compared to someone who hasn’t had an accident before, the rate of increase is highly dependent on a number of different factors. For example, the state where the insurance is being sought will greatly influence how much effect the history of an accident will have in the calculation of premium. This is because the effect that an accident may have, usually will lead to a great variation in the increase of premiums. On the lower end, only a twenty percent increase may occur, while on the higher end, fifty percent increases may occur.
Rates Vary by State
There is readily available data that shows which states provide the most leniency regarding insurance applicants with a history of car accidents. Generally, more rural states will have a lower penalty imposed on applicants that have made car accident claims in the past. Conversely, densely populated areas that already have high rates of car accidents will penalize those that have been involved in such situations much more than a rural area. Thus, this should be kept in mind if someone has a history of claims and is looking to get cheap car insurance.
However, there recently has been a number of different insurance companies that have implemented a forgiveness policy for applicants that have only had one claim in the past. Not all companies have adopted this policy. However, there is currently an increasing trend for insurance providers to discount the effects of a single claim in the history of an insurance applicant. It is worth noting that almost all of these forgiveness policies are limited to a single car accident in the past. If there is a consecutive number of claims that have been made beforehand, then it is almost certain that such policies will not be able to be applied.
A Better Credit Rating May Help
Generally, one way to counteract the effects of a past accident and the resulting increase in premiums is to get a better credit rating. Credit rating plays a large role in determining insurance premiums as well. Thus, if a person is faced with a larger premium because of a crash, they may spend resources on developing and bettering their credit rating. Usually, this means that with a little bit of effort, they will be able to pay their original premium, or sometimes even less, because their improved credit ratings have counteracted the original raise in premium. Hence, there are many other useful tactics that can be enforced by an insurance applicant with a history of accidents to lower their premium.
Thus, although it is almost certain that car insurance premiums will be increased if an insurance applicant has had an accident before, there are other factors that also have to be considered. For example, the increase in premiums may not be too bad if the applicant is in a rural state that is known for being lenient towards individuals with histories of accidents. Furthermore, the increased premiums can be sought to be counteracted through such means as credit ratings.
