How Much Do Car Insurance Costs Increase After an Accident?
Your car insurance policy is a binding contact between you and your insurance company that can protect you from financial ruin. In exchange for your monthly premium payment, your insurance company has agreed to assume responsibility for any property damage or injury you cause with your vehicle.
The hard reality for most drivers who cause an accident is that their car insurance costs can increase – often significantly. Whether it will increase and by how much depends on a variety of factors, such as your age, where you live, your prior driving history, and your insurance company. Overall, younger motorists tend to experience bigger insurance increases after a collision as insurance companies generally perceive them as being the riskiest customers.
Studies have shown that, in Colorado, drivers who were found to have caused an accident saw a car insurance rate increase of about 44%, on average. This puts Colorado far below states like California and Massachusetts where auto insurance rate increases arising out of at-fault accidents fall within the 75-80% range.
Of course, the more damage you cause in an accident, the higher your monthly premiums are likely to climb. Combine that with a checkered driving record and other relevant factors such as moving violations or a failure to pay your premiums on time and you could see your car insurance rate go up astronomically.
Why do Auto Insurance Rates go up After an Accident?
An auto insurance rate hike following an accident that you caused isn’t intended as a form of punishment – even if it might feel that way. Rather, your auto insurance rate goes up because you have now demonstrated yourself to be a more accident-prone driver. Your accident is a “red flag” to your insurance company indicating that you are more likely to have similar road mishaps in the future.
Instead of absorbing that risk and likely putting itself on the hook for future accidents that you cause, your insurance company will likely reallocate the higher risk back to you in the form of higher premiums.
What if I Didn’t Cause the Accident?
If you do not have any other claims on your record, a no-fault accident should not raise your insurance premium. However, depending on the insurer, your car insurance premiums may still go up following an accident that you did not cause. In fact, a study has shown that some insurance companies actually raise their rates by 10% or more with respect to their no-fault accident claims.
If your rates do go up, you can attempt to lower your premiums. Try the following:
- Raise your deductible
- Make sure you are getting all offered discounts
- Bundle your policies
- Shop around for a new insurance company
Contact Whalen Hersh LLP – Colorado Injury Lawyers
The complexities of car insurance often necessitate hiring an experienced lawyer for guidance following a serious traffic accident. Whalen Hersh, LLP is a thriving Colorado personal injury law firm that will be pleased to discuss your legal options with you if either you or a loved one have been hurt. Let our team of dedicated lawyers vigorously pursue the compensation to which you or your family member might be entitled, such as money for medical expenses, lost wages, and pain and suffering.