Did you know that a third of all vehicle collisions are rear-ended collisions? They often happen when someone crashes into a car stopped at a red light or stop sign. Or if a person drives into an object, like a pole, plant, or another parked car. Cars crash into other parked vehicles more than any other stationary objects. If you or someone you care about has been involved in a car accident, you might be wondering if the accident will cause their insurance rates to go up. Read on for more information about how a vehicle collision can affect your car insurance rates.
If an accident causes your auto insurance rate to increase, that is considered a chargeable accident. Generally speaking, an accident is deemed to be chargeable if you were more than 50% at fault and caused one or more of the following:
- Damage to someone else’s property
- Bodily injury to someone else
- Someone else’s death
Do All Accidents Make Your Insurance Rate Go Up?
Not all car accidents are chargeable. That means that not all car accidents will necessarily make your insurance rate go up. Some examples of accidents that would be considered non-chargeable are:
- Your car was hit by another car and damaged while it was legally parked.
- Your car was hit by another car in a rear-end collision, and you, or the vehicle operator, were not convicted of a moving traffic violation pertaining to the accident.
- Your car was struck in a hit-and-run accident. (You should report the accident immediately to the police as soon as you discover damage)
- You were involved in a car accident, and the other vehicle operator was convicted of a moving traffic violation related to the accident, and you did not receive any traffic violations.
- You were involved in an accident caused by a collision with an animal or fowl.
- A falling, flying, or missile-like object caused damage to your car or caused you to get in an accident.
- You were involved in an accident while responding to an emergency, and you are a volunteer or paid member of the local fire department, first aid, or law enforcement agencies.
- If your car insurance company was able to recuperate 80% or more of your accident claim through subrogation (meaning you were able to collect damages from the other driver’s insurance company).
- You go to court for the accident you were involved in, and the court judgement rules against the other party for causing damages.
- You were involved in an accident involving personal injury protection (PIP) coverage, and no payments were made under liability or vehicle collision insurance.
How Can I Prove an Accident Was Not My Fault?
To be able to deem your accident not chargeable, meaning it does not increase your insurance rates, insurance companies might ask for proof that the accident was not your fault. To prove to insurance companies that the accident was not due to your own negligence or wrongful actions, you could provide:
- A police report clearly stating which party was at fault for the accident.
- A statement from the other person’s insurance company admitting guilt.
- A legal document that shows that you were compensated for damages.
- A written statement from the other driver attesting to their fault.
What Is an Auto Insurance Surcharge?
If your auto insurance increases after you’ve been in an accident, that increase is called a surcharge. You can find out whether you’ll be getting a surcharge when you renew your auto insurance policy. Insurance companies cannot enforce a surcharge during a policy period that is already in place. You can also receive potential insurance surcharges from moving traffic violations.
How Long Will a Surcharge Affect My Car Insurance Rates?
The length of a surcharge for a particular car accident will vary depending on which state you live in and what insurance company you have a policy with. They typically last from 3-5 years on average. A surcharge might affect your insurance policy but slowly decrease with every year that you drive accident-free (or other surchargeable driving events).
Is There a Difference Between a Chargeable Accident and a Chargeable Incident?
A chargeable incident refers to a moving traffic violation. Examples of chargeable incidents include speeding tickets, fleeing the scene of an accident, or driving under the influence. Both chargeable incidents and chargeable accidents can affect your car insurance rate.
What Else Can Cause My Insurance to Increase?
Insurance rate surcharges vary depending on what insurance policy provider you have and the laws in your state. Here are a few common factors that most insurance companies take into consideration for insurance rates:
- How severe was the accident? The gravity of an accident and the costs affiliated with the claim will affect rates. A minor rear-end collision won’t usually have the same impact as a major car accident involving severe injuries and damages.
- Do you have a clean driving record? Insurance companies favor safe drivers. If you have been driving for several years free of accidents or moving violations, your insurance company may decide not to raise your rates for a minor accident.
- What are the other details of your policy? Your insurance policy might have accident-forgiveness. This means that your insurance company won’t raise your insurance rates after an accident.
How Does Accident Forgiveness Work?
Sometimes insurance companies employ policies that include accident forgiveness. As is evident in the title, this means that your insurer will forgive the accident, and your insurance rates won’t go up. Policyholders usually pay more for a policy that includes accident forgiveness, while other companies offer it as a bonus to certain customers. A few things to know about accident forgiveness:
- Not all car insurance companies offer it. Some states even prohibit accident forgiveness.
- It’s limited. Accident forgiveness can usually only be applied to one accident per policy (rather than one accident per driver). Sometimes accident forgiveness policies are only applicable within a given time frame. For example, an insurance policy might forgive one chargeable accident only every three years that a policyholder has driven accident-free.
- Even if an accident is forgiven, it stays on your driving record. Other insurance companies can see your driving record, which may affect your rate if you decide to switch to coverage with a new company.
How Does My Insurance Company Find Out About Car Accidents?
Insurance companies typically review your driving record or motor vehicle record (MVR) when you apply for a new policy and when you renew your policy. An MVR will include all accidents that have been officially reported. So if you are in an accident and the police arrive on the scene, this most likely means that there is an accident report, and the accident will show up on your MVR. Depending on what state you live in, you may be required by law to file an accident report to the DMV if damages have exceeded a certain amount or anyone sustained injuries. A few other things that can be found in a person’s MVR:
- Moving traffic violations
- Court convictions related to traffic violations
- License suspension or a revoked license
- Any license restrictions
- Insurance status
- Ignition interlock requirements
Anyone can request a copy of their MVR from their state’s department of motor vehicles.
In addition to your driving record, insurance companies rely on databases to see all of your past claims. Through these databases, insurance companies might be able to see if you were ever paid out from a claim, if you had any potential claims (such as if you inquired about damages to your insurer), or if you formally denied a claim.