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Car insurance rates are affected by many factors, including where you live and the type of car you drive. Your driving record is one of the most important factors and the biggest one you can control. A speeding ticket can cause your car insurance premium to go up, but an accident is considered even worse. Here’s what you should know about how your car insurance is affected by an accident.
Why an Accident Causes a Rate Hike
Car insurance is designed to protect you from the financial risk of an accident, which may involve medical bills, damage to your car, and legal liability. Your auto insurance company bases your premium on the likelihood you’ll make a claim. If you have a history of car insurance claims, a record of speeding tickets, or a car that performs poorly in crash tests, you’re considered riskier and you’ll have higher rates. When you get into an accident, you may be viewed as a higher risk to insure and the insurance company will increase your premiums to offset this risk.
To know how different types of accident can affect the rate of your auto insurance, National City insurance agents can be helpful.
What Is Considered an Accident?
Car insurance companies can define what is considered a “qualifying accident” for the purpose of assessing your risk. Some insurance companies define an accident as a claim of $750 or more in combined property damage and collision coverage, while others set the threshold lower at $500. Your share of fault in the accident will also matter in California. If you’re less than 50 percent at fault, your insurance provider won’t charge you higher rates for the accident.
At-Fault Versus Not-at-Fault Accidents
California law prohibits insurance providers from increasing premiums for drivers involved in accidents if they weren’t at fault. If you’re found even partially responsible, an increase in your car insurance premium is likely. California tends to have the highest rate increases for accidents in the country because state law requires that insurance companies give special weight to three factors to determine premiums: driving record, driving experience, and miles driven per year. Only once these factors are considered can the insurer then consider something like geographic location. California law forbids insurers from considering age or credit history. If you’re involved in an at-fault accident, it could tarnish an otherwise clean driving history.
How Much Can Your Insurance Go Up After an Accident?
The increase in your premium will depend on several factors, including your driving history, whether you were at fault, whether the accident caused only property damage or bodily injury, and your insurance company. Rates can increase anywhere from 20 percent to more than 90 percent after a single at-fault accident. In California, where the average annual rate for car insurance is about $1,460, one at-fault accident with bodily injury causes an average premium increase of 90 percent to $2,750. However, this surcharge varies by insurance company.
If you need reliable and affordable car insurance, reach out to Altra Insurance Services. We also offer top-quality motorcycle insurance. National City families can receive a complimentary quote by getting in touch with one of our friendly agents at (800) 719-9972.