Car accidents are a scary thing for anyone to go through. After the immediate aftermath and ensuring everyone is safe, it’s important to consider the financial impact. Car insurance is a significant monthly expense, and this can be made worse after an accident.

However, car insurance rates going up after an accident isn’t always a certainty. Here will look at what happens to car insurance rates after an accident, including what happens if you were at fault or not. By the end, you should have a clear idea of how your premiums may be affected.

What Happens to Car Insurance Rates After an Accident?

The short answer is probably, but not always. Your car insurance premium is determined based on your risk profile. A wide range of factors go into this, such as your age, type of vehicle, coverage selected and much more.

After an accident, insurers will reassess your risk profile. One of the other factors considered is your driving history. Whether or not you were at fault for the claim will be the biggest factor in whether or not your rates will increase.

Ontario specifically has a ‘no-fault’ insurance system. This means that each insurer is responsible for the costs of the vehicle they cover. The advantages of this can be quicker claims processing and payouts, but insurance companies can still determine fault. Due to this, whether you are at fault or not can still have a significant impact. Let’s look into that in more detail.

Related Article: https://www.marathoninsurance.ca/blog/why-does-car-insurance-increase-so-much-after-a-claim/

At-Fault vs. Not-At-Fault Accidents

At-Fault Accidents – If you are deemed responsible for the accident, then insurers will usually view you as a higher risk of another claim. This, in turn, will lead to higher premiums. Exactly how much the rates will increase can depend on the severity of the accident and also your previous driving record.

Not-At-Fault Accidents – In cases where you’re not deemed at fault, your insurance may not rise. However, this can depend on the insurer, the nature of the accident, and the province. Even if rates do increase, it won’t be as much as if you were at fault.

Other Factors Affecting Your Rates After a Collision

Along with whether or not you were at fault for the incident, several other factors can affect how much you’ll need to pay.

Accident Forgiveness

You may have accident forgiveness as part of your policy. This will allow you to avoid a rate increase after your first at-fault accident. However, there may be specific terms applied to this such as your driving record.

Claim Frequency

If you have a history of multiple claims, even if not at fault, your insurer may consider you a higher risk. Conversely, if you have a long history of clean driving then this suggests that repeated future claims will be unlikely. Here your increase may not be as sharp as someone with a bad record.

Severity and Cost of the Accident

The severity of the accident and the associated cost will also be taken into account. More severe accidents will lead to a greater cost to the insurance company. They may try to defer some of these costs to you.

How To Fight Against Rate Increases

If you’re worried about your rates increasing, there are a few steps you can take to lessen the impact in the short and long term.

Maintain a Clean Driving Record

If you’re faced with high premiums after an accident, the best thing to do is to keep your record clean. This will steadily bring those rates down over time. Along with avoiding accidents, it’s important to avoid traffic violations or any other action that can affect your record such as an expired licence or driving without insurance.

Consider Higher Deductibles

If you’re not happy with your new premium, you can consider a higher deductible. This will lower your premium but does mean you’ll need to pay more out-of-pocket if you do make a claim. This may be a risk worth taking until your premiums come down.

Shop Around for Insurance

Don’t just accept an insurance renewal thinking it’s the only deal you’re going to get. It pays to shop around and see if any insurers will offer you a better premium. Using a broker is a great way to get expert advice and the best quote from several companies.

Take Advantage of Discounts

Many insurers will offer a discount for various reasons. This can be bundling such as combining home and auto insurance, or other types of insurance. These can include adding anti-theft devices or defensive driving courses. These can all reduce the amount you have to pay.

Related Article: https://www.marathoninsurance.ca/blog/what-are-some-tips-to-lower-car-insurance-in-ontario/

Final Thoughts

Accidents can happen to the best of drivers. Sadly, they will usually come with higher premiums. If you were at fault, higher premiums are an almost certainty. If not, then it’s still a possibility, but less likely.

If you are facing a car insurance increase, then it pays to shop around while your driving record recovers. If you need a new car insurance quote, then contact Marathon Insurance today. We’ll be happy to go through your details and write the right quote for you.