If you’ve been in a fender bender or other collision, you may wonder, “Does a car accident raise my insurance rates?” While it’s possible that a serious accident could increase your costs, not every incident will do so.
Lake Region Insurance Agency is ready to help you secure the best insurance policies at prices that fit your budget.
Our independent agents in New London, Cokato, and Wilmar, MN, offer high-end service and small-town values. Contact us today to enjoy a free policy review, and we’ll make sure to find the coverage that’s right for you.
How Do Companies Determine Auto Premiums?
As with any coverage, car insurance rates revolve around risk. The more risk an insurance company takes on, the higher the premiums rise.
Several factors go into setting your auto insurance rates. Some are under your control, and others are not. The top rate influencers include:
- Value of Your Car – The age, condition, make, and model of your car impact its value. And the value helps determine the cost to insure the vehicle. Something with a higher value to replace or repair will carry a higher premium.
- Policy Type – Every state requires vehicle owners to carry a liability policy. It helps to protect you if there is a car accident where you are at fault. If you add comprehensive coverage, you’ll pay a higher rate. This insurance covers your repairs, property damage, and medical expenses you incur, regardless of who was at fault. It also kicks in if someone steals your car or if it sustains damage due to fire, vandalism, or natural disasters. If you owe on a car loan, your lender will require you to carry comprehensive insurance.
- Deductible – The deductible is the amount you must pay out of pocket before the insurance carrier pays your claim. Lower deductibles lead to higher premiums and vice versa.
- Location – If you’re insuring a car in a place with high crime rates, hazardous roads, or icy weather, you may have to pay higher premiums. The same is true of densely-populated areas.
- Driving record – If you’ve had previous accidents or moving violations, you probably will pay higher premiums than someone with a squeaky clean driving record. Speeding tickets can impact your insurance rates if you’ve gotten several within three years.
- Age – A driver’s age is one of the most significant factors in determining auto insurance rates. Young drivers require the highest premiums of any age group. People ages 16 to 25 can pay up to four times as much for insurance than their more mature counterparts.
- Gender – Teenage boys and young men are, statistically, riskier drivers. Because of this fact, insurance companies mitigate their risks by charging these drivers significantly higher premiums. Once a man turns 25, his premiums will drop if he has kept a clean driving record.
With so many factors in the mix, it’s no wonder there is confusion about how much an accident can impact your costs.
Do Car Accidents Raise My Insurance Rates?
Not all car accidents are created equal. Obviously, a bumper tap in a parking lot does less costly damage than a head-on collision.
If you bump another car from behind, or you lightly scratch an adjacent vehicle in the parking lot, take a deep breath. You may be in the clear for insurance rate hikes if your accident claim is minor.
When you know that you’ve damaged another car, make every effort to contact the other driver. You’ll need to exchange insurance information and get repair estimates. If the repair costs come in below your deductible amount, it might make sense to pay for the repairs out-of-pocket rather than filing a claim.
In more severe collisions, the insurance companies will view the police report and any related evidence, like videos, photos, or witness statements. They’ll determine fault, which could include more than one driver, and look at all the costs incurred because of the accident.
The insurance carrier will decide whether your rates will increase after processing your claim.
Your Driving Record Matters
If you are filing your first-ever claim, the carrier may not give you a higher premium. Remember, they set these based on risk.
If you have a stellar driving record otherwise, a first claim may not impact your rates. Again, the severity of the accident will also be a factor. Any accident claims that you file stay on your record for three years, even if you were not at fault.
Reduce the likelihood of another costly incident by remembering to:
- Observe the Speed Limit
- Drive Defensively
- Always Wear Your Seatbelt
- Never Drive Distracted
Accident Forgiveness and No-Fault Insurance
Some insurance providers offer accident forgiveness or no-fault insurance. A no-fault policy covers medical expenses incurred by either party, no matter who is at fault. Your premiums may still increase after an accident, depending on the size and scope of the claim.
You also might be eligible for an accident forgiveness policy for your vehicle. You’ll likely pay a higher premium or extra fee for this coverage. But your rates won’t elevate if you file an accident claim, no matter who’s at fault.
It’s smart to look into all your policy options when insuring your car. If you’ve had a prior accident, you may save money in the long run by purchasing an accident forgiveness policy.
Let’s Save You Some Money
At Lake Region Insurance Agency, we know that the worst can happen no matter how careful or cautious you are. Trust our independent agents to help you shop the market for the best rates possible. We serve our customers, not the insurance companies.
Our clients are also our neighbors, so we serve Greater Minnesota with pride and care. We’ve been a trusted insurance partner for decades, and our values guide all of our interactions with clients.
Call or stop in for a free coverage review and a quote for the policies that meet your needs. Our team is eager to help.