I Was In An Accident, Will My Car Insurance Rates Go Up?

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You were on the phone, got distracted and before you knew it traffic had stopped, giving you no room to stop and you rear end the girl in front of you. Or, let's say you're driving along and a deer jumps out and rams into the side of your door.

Now, let's say you need to file and claim and get your car fixed. But, are your rates going to go up?

In the first case, more than likely they will depending on how much your insurance company pays out to fix both cars and medical bills if anyone was injured.

But in the second example, there is a demand global rates should not see an increase at your renewal. If you have a long history of hitting deer try to get people from PETA. Or, if you have a lot of glass damage claims then files may affect rates or you can have a more comprehensive deductible when glass damage if small to be less pay for your deductible and paypocket.

Part 2: How long does an accident stay on my record?

Ok, so back to the example where you rear ended someone. We have already established that you are going to see your insurance rates go up. Now, we need to find out how long and how much will they go up.

State insurance boards usually allow insurance companies to charge for a accident for 3 years from the day they started charging for it. Not from the time you got into the accident. You got in the accident in December and your policy runs from October to April. Your rates won't be affected until April of the next year and the surcharge will drop off 3 years from that April.

How much will your rates go up? Are they trying to get back the money they paid out for my claim? You can usually expect a rate increase of between 20-40% on average per six months. They could go up even more if you lose some discounts you were getting, such as a claim free discount.

The increase is not a recoupment of the monies paid out by your insurance company. It is designed to charge you a premium based on the risk, or chance, that you will get into another accident in the next 3 years. You are a higher risk to the insurance company and they are able to charge you for the higher risk you present to them.

If it was based on how much the insurance company paid out then you wouldn't be able to afford it if you totaled out your 2004 Nissan Maxima at $25,000 and you had to pay that back within the 3 year surcharge period. Makes sense? Good, now get off the cell phone!

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