Working With your Car Insurance Company After the Crash

By: David Schneider, Car Insurance Expert
CheaperCarInsurance.com

Got into a car accident? You’ll have plenty of stress, dealing with filing your claim with your auto insurance company, getting your car repaired and working out details with the other party involved in the collision. But your biggest shock may be yet to come: most drivers who are at fault in an auto accident find their premiums rise after the incident as much as 30% (for just one accident).

What Will The Increase Be?

Whether you will see a price hike in your premium is often difficult to determine before you get into an accident, as it’s not a set price increase across all insurance companies. Your insurer will likely have its own formula for determining whether a policyholder will have to pay more after an accident. Most insurance companies charge an average of 20-40% more than the premium, but others base the increase on how long you have held insurance with the company, the rest of your driving record, and other factors.

Should you be at fault for more than one car collision, your insurance company may charge as much as 150% more for your premium, or drop you altogether from your policy, if the company deems you a high risk policyholder.

How Can I Prevent an Increase?

The simple answer to this is: don’t cause an accident. Drive carefully. You won’t be able to sweet talk your way out of an insurance rate increase, unfortunately. But you can prepare yourself before you potentially get into an accident:

• Ask your car insurance agent for the insurance point plan. This is the document that explains how your company determines rate increases for drivers who are in accidents.
• After you read it, ask your agent questions about anything that isn’t clear. This is his job as your agent: to make things easy to understand.
• Ask if you have an Accident Forgiveness clause in your policy. Some auto insurance companies like AllState and State Farm won’t raise your rates after just one accident; however, some companies require you to have been insured with them for as much as nine years, so check on this before you assume you’re covered.

According to Insurance.com, the average insurance premium can up to double after an accident claim.

If you’re shopping for car insurance online, look to see what each auto insurance company’s policy is about charging a premium for policyholders who are involved in a car accident and who are at fault. If they do charge more for accidents, factor this in when building your quote. A $600 policy could easily become an $800 or more policy if the insurance company’s accident fees are strict.

What to Do After an Accident

If you have caused an accident and are looking for some respite after a price hike in your auto insurance rate, be good. Most companies will lower your rate again after a predetermined period of good driving history after the accident. Check with your insurance agent to see what that period is (it may be as low as 18 months). After that period is complete with no major driving issues on your record, call back and get your lower insurance premium reinstated.

Or, if you’re ready for a switch, get quotes from other car insurance carriers to see if you can save even more money by switching insurance companies. Have a list of criteria readily available when looking for your auto quotes online:

• How much coverage do you want?
• How much can you afford should you have to pay a deductible?
• Do you need rental or roadside coverage?
• What’s your driving history?
• How much can you afford to pay for car insurance every 6 months?
• Do you prefer to work with your policy online, or do you want a local agent to deal with?

These questions will help you determine how much you will pay by switching your auto insurance company and can help you get exactly the coverage you need.

Posted: January 01, 2010