You’ve just been in an accident. Whether you swerved to avoid a dog loose on the road or got into a collision with another person’s vehicle, your car is damaged, and you are dreading your next renewal time because you are certain that your premiums are going to take a turn for the worse.
Why might that be the case? Well, typically auto insurance providers will determine the cost of your coverage based on your accident history. If you have recently been in a collision or crash you are likely to see a rise in the amount you will have to pay the next time your insurance is up for renewal. But then again, that might not be the case. If you were not deemed to be “at-fault,” your driving history is clean, and this is the first accident you have been involved in, you may see no change whatsoever.
But if the accident was caused by you (or you have been in too many accidents in the past) you will likely see an increase in the cost of your insurance. The amount of increase depends upon your provider and how severe your accident was. But not to fear –there are a few ways you can mitigate your premium increases following an accident.
First and foremost: be open with your insurance provider.
This should go without saying. Tell your insurance provider about the accident and lay out every detail, no matter how small. Even if the accident was just a tiny scrape or was not caused by you, you should be open about the details in case the other driver takes legal action months later. In this event, your insurer could refuse to help cover any legal costs – which means that you will be responsible for all the bills and any possible judgements that are not in your favour. These costs will easily far outweigh the potential increase in your premiums.
When it comes to your insurance, withholding information is never a good idea. Be open with your provider as it will save you both time and money later down the line.
Increase your deductible amount.
In a situation where you do see an increase in your premiums following an accident, you may want to consider increasing your deductible to counteract the costs. A deductible is the amount you are required to pay out when making a claim before your insurance provider can jump in and cover the remaining costs. You can reduce the cost of your premiums up to 40% by raising your deductible from an amount like 200$ up to $1,000. Keep in mind, however, that you will need to be able to pay the deductible amount in the event that you do find yourself involved in another accident.
Shop around for a new policy.
If you find yourself unhappy with your new rates, maybe it is time to shop around for a brand new car insurance policy. Be conscious of the fact that different areas may see different rates depending on what factors affect your commute, how far you need to drive everyday, and how likely you are to be involved in another accident.
For instance, if you were looking for Calgary car insurance, you might want to compare rates in the local area to determine what policy or provider is the best fit for you. You should also be conscious of what risks you may be exposed to in the area and purchase coverage accordingly.
Address other possible discount opportunities.
You can save on your premiums by opting to drop unnecessary coverage options or take advantage of certain discounts that may be available to you. For instance, if your car is older and more likely to be written off in an accident, you may opt to drop collision and/or comprehensive coverage altogether. (Keep in mind that this is not possible if you lend your car, since may renters will require you to carry a certain minimum of coverage.) If you have been with your insurance company for a few years, your insurance provider may offer you lower rates as part of a loyalty discount.
You may also be offered a discount if you take a driving class. This is especially helpful for young or new drivers who have recently acquired their driving license and may be seeing higher rates due to unfavourable statistics. Finally, you may want to note that if you drive below what is considered the average number of kilometers per year, you may be eligible for a discount. Discuss with your car insurance broker about what discounts you may qualify for in order to make the most of your possible savings.
Check to see if your provider offers accident forgiveness.
Some insurance providers will offer something called “accident forgiveness” which is basically a situation where your provider or insurance company will disregard one accident as long as you qualify. You may qualify if both you and anyone who drives your car has a clean driving history with no at-fault accidents. In this case, you will not see a rise in your insurance costs. If you are involved in a second accident, however, you will likely see an increase.
Many factors will determine whether or not you see a change in your premiums at all following an accident. Your insurance providers are likely to be willing to work with you in order to keep your premiums manageable following an accident so be sure to be open with them regarding the details of the crash or collision you were involved in. Also keep in mind that your auto insurance premiums are subject to increasing for reasons unrelated to accidents, especially if you have recently taken a new job and your commute is further, if you have added coverage recently, and more. If you have any questions as to more ways you can keep your premiums manageable, be sure to contact your insurance broker. They will be able to review your situation personally and can offer their expertise and wealth of knowledge to you.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.