With auto insurance, in general, rising around 5% every year, it’s clear that people are paying more for their car insurance. While a number of factors can influence how much someone is paying for their premium, accidents can be a big cause of car insurance rising.
The first question many people have after an accident — after ensuring everyone is okay — is, how will it affect their insurance?
If you’ve been in an accident, chances are, your car insurance is going to rise and there’s little you can do to avoid it.
You can, however, influence just how much that rise is going to be if you’re careful about it.
What Influences the Rise in Rates?
There are many things that influence the rise that comes after an accident. Some are more controllable than others.
The Extent of the Accident
Car insurance after an accident will depend on exactly what happened. A light bump with minimal damage to either vehicle will raise the insurance far less than a wreck would.
This is because the claim will be much higher for an accident where a lot of damage was sustained. As you cost the insurance more money, the insurance rates will rise in turn.
The Company and State
The amount that your car insurance rates rise will ultimately depend on the company, and how long it stays on your record will depend on the state. In North Carolina, that’s around three years.
A History of Accidents
If you have a history of accidents — especially if you were at fault — your car insurance is likely to way higher than a first-time offense.
This is because the more accidents you’re in, the more you’re likely to continue claiming. If you cause multiple accidents, especially in a short period of time, you will see your insurance rates shoot up.
Why Does It Rise?
The simple reason it rises is that you look like a risker driver to the company, which means you’re going to cost them more money. The company accounts for this by charging you more car insurance so the likely loss isn’t as big to them.
How Can You Affect the Increase and Make It Smaller?
If you’ve been in a car accident and your insurance has risen, it can be a horrible feeling and one that can be a huge stressor. However, there are ways you can reduce your rates if you know how.
You can always shop around for other insurance. Each company will know you’ve been in those accidents, but some may offer you something cheaper than what you’re currently paying.
The only way to find out is to contact other companies to get quotes. You might find out that what you’re paying now is the cheapest you can get in your circumstance, but it’s worth a shot.
Improve Your Credit Score
Your credit score plays a huge part in influencing your car insurance, so improving it can help to take payments down — even though it’s not directly to do with your accident.
Make sure you pay all of your bills on time and don’t max out lines of credit. You can always take out more, if you trust yourself to pay them on time, just to make your credit utilization percentage lower.
More expensive cars are more expensive to insure — it’s as simple as that. If you’re struggling with your insurance payments, it might be time to downgrade the car and drive something else for the time being.
Check Out Accident Forgiveness Clauses
Since you’re already insured, your only real option is to check if your own policy already has this. Some policies have an ‘accident forgiveness clause’.
People get into accidents every 18 years on average, even the best of drivers. Many insurance policies account for this and will forgive a no-fault accident.
Some policies will allow this right away and some require you to have been a policyholder for a certain number of years, but it’s worth calling up your insurance to ask. If you’re switching car insurance, ask about this, as it can be a financial life-saver.
Increase Your Deductible
Some insurance companies will allow you to increase your deductible so you can pay a lower premium. If you take this option, you should drive extra carefully, as the deductible will likely be something you’d struggle to afford if the premium is already too much.
Lower Your Coverage
You need some liability insurance to legally drive in North Carolina, but if you have more comprehensive insurance, you can cut some of that out and it will take your rates down.
This should be used as a last resort, as you’ll end up in a worse financial situation if something else then happens that you’re not covered for, but it can work if you seriously can’t afford the new insurance payments.
Lowering your insurance coverage isn’t an easy choice, and it should be a temporary solution.
Car Insurance Will Rise After an Accident, but You Can Influence How Much
It’s unavoidable for car insurance rates to rise after an accident unless you have an accident forgiveness policy in place. Just how much depends on your circumstances, such as your history of accidents, your state and insurance company, and perhaps how long you’ve been with the insurance company.
If you’ve been in an accident, the first thing you should do is be upfront and honest with insurance and take it from there.
For personal and commercial auto insurance in North Carolina that you can trust, contact us today.