How Does an At-Fault Accident Affect Your Insurance

How Does an At-Fault Accident Affect Your Insurance
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How Does an At-Fault Accident Affect Your Insurance

How Does an At-Fault Accident Affect Your Insurance
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Unfortunately, accidents happen to everyone. Indeed, according to available statistics, there are six million car accidents – resulting in three million injuries – every year. There is no question that a car accident can be a severe life event that can be expensive, dangerous, or even deadly.

Anyone who has ever been responsible for a car accident knows that an accident can impact insurance rates. Indeed, if you are responsible for a car accident, you may find that your auto insurance rates increase dramatically. Fortunately, by finding the right car insurance policy, you can reduce the long-term impact that any at-fault accident has on your driver record.

Will an At-Fault Accident Impact Your Car Insurance Rates?

There's no such thing as a guarantee, but if you get into an accident, there is a good chance that your insurance rates will increase. Of course, this depends on various factors, including your age, driving history, location, the severity of the accident, and more. 

It is essential to understand that one accident may not make or break your insurance rates. This is because your insurance company doesn't use any single factor to determine your insurance rates. Instead, they use a variety of factors to do so. 

This includes:

  • How long you have been driving.

  • Your prior driving record, including any speeding tickets or other moving violations, and past record of driving accidents.

  • Demographic factors that may impact your odds of getting into an accident include age, gender, amount of time you spend on the road, type of car you drive, and location.

Your comprehensive driving record will ultimately be what impacts the rate that an at-fault accident has on your car insurance rates, if any. For example, if you have been driving for thirty years and get into a minor at-fault car accident where no one is hurt, and you didn't violate any laws, your chances of seeing a significant increase in your car insurance rates are low. However, if you've been driving for six months and get into a major car accident in which you were recklessly driving, you are very likely to see an increase in your insurance rates. 

To be clear, the amount your car insurance rates will increase after an at-fault accident may be significant. According to national surveys, car insurance rates will rise, on average, by 45% if you cause an accident with property damage. That number increases to 47% if someone is injured. 

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What Factors May Mitigate or Exacerbate This Impact?

The above paragraph begs an important question — if I am in an at-fault accident, what factors make it more or less likely that I will see an increase in my insurance rates? Many potential answers are specific to the incident in question, including the following. 

The severity of the accident

All accidents will not be treated the same by your auto insurance company. A car accident that involves relatively minor damage to your car and the car of the other victim will be treated very differently than a head-on collision that results in both vehicles being totaled. The total amount of damage to your car – and the amount that your recklessness or carelessness contributed to the accident – will be significant factors in determining the ultimate effect that an at-fault accident will have on your insurance rates. 

Tickets given

Sometimes, you may be at fault for an accident, but it can be chalked up to "one of those things" and not as a result of any intentional lawbreaking or other traffic violation. In these incidents, you may not be given a ticket or cited by police for anything. However, being cited by police for causing an at-fault accident will show additional culpability. This increases the chances of your car insurance rates being increased by your insurer.

However, again, there are degrees of severity. Your car insurance company will treat a ticket very differently if you are cited for illegal parking versus being cited for driving thirty miles over the speed limit while in a school zone.

Injuries or property damage

All other things being equal, a car accident will be viewed more seriously by a car insurance company if there is a major injury or property damage beyond the damage that goes to another car. If someone is seriously hurt or killed in an accident that you cause, your insurance company will be on the hook for potential legal settlements, medical liability, and more. Likewise, if you cause significant property damage, such as damaging someone's home or business, your insurance company will have to pay these damages. This can be a significant expense for your insurance company, which will likely be reflected in your future rates. 

Laws broken

All at-fault accidents are not created equal. Sometimes, they are simply the cause of bad luck or momentary carelessness. In these instances, no law is broken. However, if you cause an accident by breaking the law – such as by looking at a cell phone or drunk driving – the accident will likely be judged much more harshly by your insurance company. 

As always, the severity of the law you break will greatly impact your car insurance rates. An accident caused by reckless driving will almost certainly not be judged as harshly as an accident caused by driving while under the influence. Furthermore, an accident caused by someone who was slightly above the legal limit for blood-alcohol content will not be judged as harshly as someone who was driving at twice the legal limit and was just arrested for their third DUI. 

Driving history

Your driving history is a huge factor for determining how any at-fault accident or other negative events, such as a speeding ticket, will impact your insurance rates. The longer you drive and have a clean driving record, the more likely your insurance rates will not be impacted by a single negative event, such as a car accident. However, if you do not have a long driving history – or you have a history filled with speeding tickets and other accidents – you may see an increase in your insurance rates. 

Other demographic factors

Insurance companies use a variety of metrics to build a comprehensive risk profile. This includes factors that may be beyond your control, including where you live, whether you are male or female (men are more likely to have accidents than women), and your age, with younger drivers being charged more. This can all have a major effect on the ultimate of a car accident on your insurance rates.  

How Can I Reduce My Insurance Rate After an At-Fault Accident? 

While car accidents can result in an increase in your insurance rates, there is good news, as there are often ways to reduce your rate, even after an at-fault accident.

Accident Forgiveness

Some car insurance companies will offer accident forgiveness to their drivers as a part of their plan. Each accident forgiveness plan works differently, but generally speaking, the basics behind each accident forgiveness plan are the same. 

Policies that come with accident forgiveness will allow the impact of a car accident to be forgiven after a certain time. It is usually on a policy when purchased or can be added to a policy upon renewal. It is not available to all drivers, and a driver likely must meet certain requirements to earn it. This usually includes a history of clean driving and having been with an insurance company for a long enough time. 

Accident forgiveness varies in how it works. Some plans will simply reduce the impact of a car accident if someone has been driving with a clean record for a long enough time. Accident forgiveness may also allow a driver to keep any good driving discounts, even if they are involved in a single accident. Finally, accident forgiveness may allow a driver to get one "free" accident, meaning that their rates will not increase after they cause their first at-fault accident. However, subsequent accidents may result in an increase in their car insurance rates. 

As you can imagine, there are limits to accident forgiveness. One accident will almost certainly qualify under an accident forgiveness plan, but two won't. As such, make sure you understand how accident forgiveness may interact with your driving record before attempting to add it to your policy. It is also worth keeping in mind that accident forgiveness does not mean that an accident is deleted from your driving record. If you try to switch insurance companies after a car accident, they will see the accident on your driving record. This may impact your rates. 

Shopping Around and Bundling

Remember, you are not stuck with any car insurance company, and it is always worth examining your options to determine if there are cheaper insurance rates for you. Many car insurance companies cater specifically to drivers who have been in one accident or are at high risk. Depending on your driving record and other circumstances, you may find it well worth it to find alternative insurance coverage options after getting into an accident.

You may be eligible for group discounts that you didn't even realize in many cases. Many alumni groups and professional associations offer discounted insurance as a benefit of group membership, which is well worth inquiring about. Larger employees also often offer access to discounted insurance programs as part of a benefit of working for them, and you should contact your human resource department to determine if your employer offers such a benefit. 

You can also investigate changing the type of coverage that you get. For example, some plans have higher deductibles and lower rates. Of course, this can be a significant financial risk: If you get into an accident, even if you are not at fault, you may wind up paying more. 

Finally, many car insurance companies offer much more than just car insurance, offering an array of insurance products. This can include life insurance, home insurance, renters insurance, and more. Bundling your insurance products - meaning that you use one company to handle all of your insurance needs - is a common tactic that can help you find major savings. You can also use this method to insure multiple cars, as most insurance companies will give you a discount if you insure multiple cars with them. 

Defensive Driving Classes

Many policies will offer specific discounts for individuals who complete defensive driving classes. These classes are often available for individuals who are more likely to get into accidents, such as people with a history of accidents or very young or older drivers. In these instances, the skills learned in these classes have reduced risk. Successful completion of such a class is believed to reduce your risk of getting into an accident. As such, many car insurance companies allow individuals to take this class and become lower-risk drivers. This, in turn, leads to reduced insurance rates. 

What If I Am Not At-Fault?

Fortunately, if you are involved in an accident and are not at fault, you will almost certainly not see any impact on your insurance rates. This is because your car insurance company determines how much to charge you based on the total risk that you present to their company, with more risk requiring higher premiums to offset the potential expense of insuring you. A not-at-fault accident can happen to anyone, regardless of how good a driver is. As such, you will likely not see an increase in your insurance rates, or any other changes to your insurance policy, if someone else is responsible for damaging your car in an accident. 

Everyone deserves a high-quality home or car insurance product that can provide adequate protection while saving as much money as possible. If you are interested in shopping for less expensive insurance rates, check out PolicyScout, which can offer you a series of discounts on several insurance products. 

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