Not All Kinds Car Accidents Will Make Your Insurance Go Up

It may surprise you to learn that not everyone is an excellent driver. According to the National Highway Transportation Safety Administration, rear-end incidents account for over a third of all collisions. This type of accident is common when someone hits a stopped car at a red light or a stop sign.

We also have the habit of bumping into objects. Collisions with stationery items such as poles, vegetation, or parked cars account for more than 20% of all collisions. We also collide with parked cars (358,000) far more frequently than poles and posts (208,000).

However, not all accidents will increase your insurance rates.

What Does It Mean to Be Involved in a “Chargeable” Accident?

A charged accident can increase your auto insurance rates. This usually refers to an accident in which you were more than 50% at fault and it resulted in:

Death or bodily harm

A chargeable accident may be defined in some states as a monetary amount. A chargeable accident in Minnesota, for example, is one in which the vehicle insurance company paid more than $500 under a bodily injury liability, collision, or property damage policy, with some limitations.

In some jurisdictions, such as Massachusetts (for accidents where the operator is more than 50% at fault and driving a private passenger vehicle), A chargeable accident leads to a property damage liability, collision, or bodily injury claim payment of more than $1,000.

Not all accidents increase your insurance premiums

Car accidents aren’t always “chargeable.” Here are some examples of accidents that are not chargeable:

  • Your car was rear-ended by another vehicle, but you (or the driver of your car) were not charged with any moving traffic violations as a result of the collision.
  • A hit-and-run driver collided with your vehicle.
  • The driver of another vehicle was found guilty of a moving traffic offence in connection with the accident, but you were not found guilty.
  • A collision with an animal or fowl caused the accident.
  • Falling items, flying gravel, and missile-like things caused the damage.
  • If you are a volunteer or paid member of a fire department, first aid team, or police enforcement organization, the accident occurred while you were responding to an emergency.
  • Subrogation (which usually, implies they were able to collect from the other driver’s car insurance company) allowed your car insurance company to recover 80 per cent or more of your collision insurance claim.
  • The individual who caused the damage compensated you.
  • For the accident, there is a court judgement against the person who caused the damage.
  • Accidents where the personal injury protection (PIP) policy pays out, but neither the liability insurance nor the collision insurance policy does.

How to Demonstrate You Aren’t at Fault

An auto insurance company may ask for proof that an accident was not your fault and thus not chargeable. Satisfactory proof varies per company, but it typically includes the following:

  • A police report stating who was to blame
  • The other driver’s insurance company has issued a statement admitting culpability.
  • A legal document proving that you were compensated for your losses.

What is a Surcharge on Auto Insurance?

After a chargeable accident, you may be subject to a surcharge, which is an increase in your insurance premium. When it comes time to renew your contract, you’ll find out if you’ll be charged a surcharge. You can’t be charged a surcharge amid your policy period.

Surcharges can be incurred for a variety of reasons, not just car accidents. Surcharges for movement breaches are also possible.

How Long Will a Surcharge Affect My Vehicle Insurance Pricing?

The length of an automobile accident surcharge varies by state and insurance carrier, but it usually lasts three to five years. In states like New Jersey, New York, and Texas, for example, insurance companies can only charge you extra for accidents that occurred within the last three years.

A surcharge may be levied on your insurance policy depending on your state and insurance company, although the additional cost may decrease each year you drive without an accident (or any other surchargeable event). If you live in a state that only considers your driving record from the previous three years, the fee rise may be non-existent after three years of safe driving.

What’s the Difference Between a Punitive Accident and a Punitive Incident?

A moving offence, such as a speeding ticket, leaving the scene of an accident, or driving while intoxicated, is often referred to as a chargeable occurrence. A charged occurrence, such as an accident, can raise your vehicle insurance rates for three to five years, depending on your state.

What Other Factors Influence the Cost of Insurance?

Different insurance companies and states have different rules about what makes rates go up, but here are some of the most common reasons:

The accident’s severity

The severity of an accident and the expense of a claim can have an effect on rates. A modest fender bender usually has less of an impact than a severe collision.

Your record as a driver

Car insurance providers like drivers who are responsible. If you haven’t had any accidents or moving violations in several years, your insurance provider may not raise your premiums due to a minor accident.

Details on the policy

Accident forgiveness is a feature of some auto insurance policies that means your insurer won’t raise your premiums after an accident.

How Does Accident Forgiveness Work?

If you have accident forgiveness on your insurance policy and cause a car accident, your insurer will “forgive” the accident and not raise your rates. Accident forgiveness is usually an added cost, but certain insurance companies, such as Geico, offer it as a free incentive to specific customers.

Should you settle a vehicle accident on your own?

Here are some things to keep in mind when it comes to accident forgiveness:

Accident forgiveness is not available from all vehicle insurance carriers.

There is a limit to how much an accident can be forgiven. Accident forgiveness is normally limited to one accident per policy rather than one accident per driver. You may only be able to use it once within a specified amount of time. Farmers Insurance, for example, will forgive one at-fault accident for every three years of accident-free driving.

Even if the accident is “forgiven,” it remains on your driving record. The car insurance provider may forgive your accident, but it will remain on your driving record. If you change insurance carriers, other firms will be able to access your driving record, which could affect your prices.

What Information Does My Insurance Company Gather About Car Accidents?

When you apply for a new policy and every year at renewal time, car insurance providers look at your motor vehicle record (MVR). Accidents that have been reported to the state will appear on your MVR. For instance, if police responded to an accident scene and filed a report, such information would be included in the MVR.

In some jurisdictions, such as New York, you are required by law to file an accident report with the DMV if the damage to your vehicle exceeds $1,000 or if someone is injured.

Your MVR may also include the following:

  • Convictions for traffic violations
  • Convictions in the courts
  • Suspension and revocation of a license
  • Dates for license restoration
  • The status of your insurance
  • Requirements for ignition interlock.

Your state’s department of motor vehicles can provide you with a copy of your MVR.

In most cases, insurance providers will not depend entirely on your MVR. Many insurance firms have access to databases that contain information about your previous claims. Insurance firms are required to submit claims in which they:

  • Money was paid out.
  • Deny a claim in writing.

Here are some of the most regularly used databases by insurance companies.

Auto Loss History Reports from A-Plus. This report gathers information on previous insurance claims, such as physical injury, comprehensive and collision, personal injury protection, and property damage. Every 12 months, you can request one free report.

ANSWER (Comprehensive Loss Underwriting Exchange). This report typically contains up to seven years of vehicle claim history, including dates of damage, claim type, and settlement amount. You have the option of requesting a personal report.

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