A car accident can be a frightening and stressful event. After ensuring everyone’s safety, the next big question on your mind is probably about your car insurance. You may be wondering how this incident will affect your future rates.
Because insurance companies base premiums on risk, your rates will likely increase after an accident you caused. For Kentuckians with an at-fault accident, the average driver pays 44% more for full coverage than those with a clean record.
Why your premium may increase
After an accident, you may find that your insurance premium increases. This is because insurance rates are calculated based on risk. Drivers who have been in one accident are statistically more prone to having another traffic violation. Your insurance company adjusts your premium to reflect this higher risk.
Several factors determine how much your insurance rates will go up after an accident, including:
- Your auto insurance provider
- Your driving record
- Your claims history
- Your geographic location
- Your age and gender
Even if you were not at fault for an accident, your premium could still be impacted if your insurance company pays to cover the claim. The best way to understand how a recent accident will affect your specific rates is to contact your insurance representative and ask about your policy.
How to minimize the impact
While a rate increase may feel inevitable, you can take steps to help bring the cost of your car insurance down. If you had an accident forgiveness program on your policy before the incident, your provider may waive the surcharge for your first at-fault accident.
Here are a few ways you may be able to lower your car insurance rates:
- Improve your credit: In states like Kentucky, most insurance companies can use a credit-based insurance score to determine rates. Improving your credit standing may help lower your rate over time.
- Increase your deductible: A higher deductible on comprehensive and collision coverage typically lowers your premium. Remember, raising your deductible will increase your out-of-pocket expenses if you file a claim.
- Look for discounts: Many insurance companies offer discounts, such as for good students or for having multiple policies. Some may also offer programs that monitor your driving and reward safe practices.
After an accident, your current policy may not be the most affordable option.
What to do next
It is important to remember that while a rate increase is possible after an accident, taking proactive steps and understanding your options can help. If you have been in a recent accident, it may be beneficial to consult with legal professionals to determine your best course of action.
