The Role of Accidents in Affecting Your Premium on Auto Insurance

Role of Accidents in Affecting Your Premium on Auto Insurance

Auto insurance is a common type of insurance but it’s one of the most frequently misunderstood lines of insurance.

It covers the property or medical bills of the opposite party, in case a person is found at fault in an accident.  If there’s no coverage like this, anyone can experience life-changing amounts of liability in a flash.  This coverage is automatic by having a policy in auto insurance.

Your past accident has the highest strong effect on the rates of your auto insurance.  Insurers make use of former accidents and claims as the pointers and whether or not you’ll be having accidents or claims soon.  Consequently, the rates tend to go up and down based on the number of accidents and claims you have, and how long those things have happened. Those who don’t have accidents or claims to some extent get more favorable rates and discounts for their auto insurance policy.

Role of Accidents in Affecting Your Premium on Auto Insurance

Two kinds of accidents

There are two kinds of accidents: at-fault accidents and no-fault accidents.  At-fault accidents refer to accidents where a person is held responsible for the accident that happened.  In simply means, the accident was your fault.

Conversely, no-fault accidents refer to accidents you’re involved in and accidents the other driver is responsible for.  It means the accident wasn’t your fault.  Both types of accidents affect your rate, with at-fault accidents affecting them more significantly.

Effects of accidents on rates

These accidents don’t always affect the rates of auto insurance.  Among the insurance companies, accidents don’t affect rates five years after the date of the incident.  The degree where accident affects rates may also vary in the period of five years.  The accident affects rates if it happened within the year, affecting it less after a year, and then it affects even less, three years after until it falls after 5 years.

Having many claims or accidents on policy record within a short period of time will be detrimental in two methods.  The rates will not only go up with insurance company, but there is a chance that company will non-renew the policy. As formerly stated, the claim and accident record are used as the indicator whether or not the policyholder continues to have claims and accidents.  A car driver is considered at high risk if he remains accumulating claims and accidents.

An insurance provider won’t consistently lose finances on paying claims. They can choose to non-renew the policy and to get rid of specific coverage or grow their deductibles to go on with the coverage.  It can force car owners to shop around with other insurance providers, with chances for the new insurer not to accept them due to accident record.

Role of Accidents in Affecting Your Premium on Auto Insurance

Other things an accident record affects car insurance

Although an accident record visibly raises the rates, people don’t know that it can also affect their homeowner’s premium.  It is not for the similar extent which affects the rates, but will affect nonetheless the rates.  Usually, if a driver meets an accident and he is already insured, it won’t affect his rates anymore. The difference turns apparent during the new policy qualification.

Accident Forgiveness

Accident forgiveness is something that can control rates if there is an accident.  This is an alternative coverage that huge insurance providers give.  This can also be the secret to maintaining rates down provided there’s a single accident every few years.

As a result, there’s an incentive of driving cautiously and securely.  Not all accidents are at-fault accidents, yet it’s vital to do all things in a person’s control to prevent them, not just for insurance rates but also for one’s family sake and security.

To learn more about the role of accidents in affecting your auto insurance premium in Florida, please contact us at DMG Insurance and Financial Services, Inc. ( at 543 N State Road 7, STE 106, Royal Palm Beach EL, 33411, phone 561 422 7071, Fax 561 422 7072.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s