Will my insurance premiums skyrocket after an accident?

The consequences of an accident can last long after the dents have been fixed. If you've had a car accident your insurance premiums may rise. A lot also depends on your general insurance plan and who was at fault, among other things. What can you expect?

If you've ever been in an accident, you know that it can be traumatic. There are normally countless questions that arise. Many have to do with insurance coverage. When an accident has occurred, or even beforehand, it's a good idea to review your insurance and see how it may affect your premiums to avoid surprises later on.

If a claim is filed, your insurance provider will always determine who was at fault. The decision may come from official police records, if the police have been involved. The insurance company may also have their own investigator work through the facts.

If it is determined that you are not at fault, that's good news as your rates should not go up. Depending on your insurance, no money will have to come out of your pocket for a deductible.

If you are the sole driver, or if it is determined that you are at fault, chances are that your insurance premiums will be affected.

While some policies will automatically increase your rates after one accident, others may offer what is known as “accident forgiveness”, which keeps your rates from going up after your first accident. However, if you are involved in any other accidents, your “accident forgiveness” will likely not apply.

Depending on your previous driving history, age and the seriousness of the accident, your insurance premiums may not change. Nonetheless, it is always a good idea to discuss the situation fully with your insurance provider.

If you have had your rates increase after an accident, there are a few things that you can do to lower your payments.

• One strategy is to talk with your insurance provider to see if they have any flexibility. They may be able to work out a special deal with you.
• You can also look into bundling your insurance policies. Many insurance companies offer deals for bundling general insurance plans that will reduce your rates for each additional policy you hold with their company. If you have your home or rental insurance through one company and your car insurance through another, think about consolidating these plans to one company.

By receiving bundled quotes from a number of different insurance companies, you may find that your general insurance bills are reduced substantially.

Typically, if you have been involved in a car accident, it will stay on your record for about six to ten years. If you have had no other accidents in this period of time, you may notice after the accident is removed from your record, your rates will go down. If your rate doesn’t lower, you may want to discuss the situation with your insurance broker to see if you can get a better rate.