“Let’s just keep this between ourselves; I’d rather not get insurance involved if we don’t have to.”
This oft-repeated refrain after an accident site stems from one rather significant concern. Drivers are concerned their insurance premiums will rise if they file a claim.
And, well, they should be.
According to data provided by CarInsurance.com, rates can increase by an average of 31 percent for a driver found to be the catalyst of an at-fault bodily injury or property damage-incurring event.
But, does this mean car insurance rates always go up after an accident?
A Rate Increase Is Not Guaranteed
Insurers consider mitigating factors before choosing to raise rates after an accident. These usually include the severity of the accident as well as the resulting cost of the claim.
Your driving record is also taken into consideration. If you’ve gone years without a citation or a claim, a minor accident might be free of financial consequence. Similarly, if the accident isn’t your fault, they’re likely to say, “Hey, don’t worry about it.”
Taking the fiercely competitive nature of the car insurance business into consideration, some companies have begun offering accident forgiveness to set themselves apart from their rivals. This feature can prevent a rate increase in the event of an at-fault accident.
However, before you think it’s a get-out-of-jail-free card, keep in mind forgiveness typically only applies to your first accident — when your driving record is also clean. Determinations vary from company to company, so it’s a good idea to ask your carrier about the specifics.
With this program, surcharges that might otherwise apply are waived. Loyal customers with exemplary driving records are afforded this courtesy automatically in many cases.
Five Ways to Save After an Accident
1. Having your insurance company find out about an accident secondhand can often cost more than you would have paid had you reported it. Your premium could increase tremendously, or your coverage could be dropped if the other party decides to file a claim despite your agreement at the scene. It’s always best to report an incident.
2. If the accident is severe and you have to get another car, your insurance costs will be higher when you lease vs. buy. You might be better off purchasing a less expensive automobile to keep your insurance costs down for a while.
3. Another approach is to go to a different insurer altogether. There is a lot of competition out there, so you might be able to find a company willing to cover you for less money. Some will also lower your rate if you maintain a good record after signing up.
4. Taking a driver training course in the wake of an accident could reassure your carrier that you’re sincere about staying safe. Rather than waiting for them to ask, sign up and tell them about it.
5. Lowering your coverage (assuming your car loan or lease agreement permits) will reduce your insurance costs, even with an accident on your record. Foregoing comprehensive and collision insurance is another wise play — if you have an older car with a low value. You might also qualify for a discount if you drive less than 10,000 miles annually. Carrying a higher deductible will reduce your premium as well.
So no, car insurance rates don’t always go up after an accident. And, even if they do, there are ways to get discounts just the same. Bottom line: You’re looking at an example of false economy if you think you’re saving money by not reporting an accident to your insurance company.
The consequences could be a lot more costly if they find out anyway.