Auto insurance and accidents

If you are a safe, responsible driver with auto insurance, then you will likely pay a lower monthly premium than someone who is considered a risk by an insurance company. However, what if you get in an accident?

Even if you've never been in an accident before, your first one can have an effect on your insurance rates, and every wreck thereafter. It's important to realize the insurance companies are in the business of essentially financially covering how risky a driver you are. Even if you got in a small crash with little damage, your insurance provider might have to adjust your rates because you are now considered riskier by their calculations.

While an increase in car insurance rates is certainly a possibility, this isn't always the case. As such, you shouldn't be discouraged to file a claim with your insurance company after an accident out of fear of a rate hike. This could cost you a lot of money upfront and will negate any money you might have saved from hiding your accident from your insurer.

Following one accident, your rates can increase anywhere from 10 to 30 percent, and then another 50 or more after your second depending on your company, according to Angie's List.

Here are a few things insurance companies take into consideration when determining whether your monthly rates will increase or not, according to the Department of Motor Vehicles:

Who's at fault?
If you are the cause of the accident, then your insurance rates will almost certainly increase. Even if you aren't totally responsible for the wreck, some states label you as at-fault if you are more than 50 percent responsible.

If you can prove that you were not at fault in any way, then your rates might increase still. Insurance companies might see you as less safe than you once were, which could warrant greater coverage and higher rates. However, certain states like New York and Massachusetts have restrictions on insurance companies raising your rates if you are not at fault.

How much damage was done?
A simple fender bender is not the same as totaling your car, or even worse - injuring or killing another driver or passenger. In order to cover the costs associated with a lot of damage, insurers will raise your rates to make up the difference. It can cost tens of thousands of dollars to replace parts on a damaged car, while a scratch or dent can be fixed relatively inexpensively. Based on the magnitude of the accident, you can expect your rates to reflect the amount of damage.

What's your driving history?
One accident can be a statistical anomaly for otherwise safe drivers. Insurance companies may work with you and trust that you are not inclined to get in a future wreck. This will allow you to keep your same monthly rates if you are important to the company. Every company needs safe drivers to keep costs low, and accident-forgiveness programs are becoming more common around the country.

Speak with your insurance company to get up-to-date information regarding your personal driving record and your monthly auto insurance premiums.

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