How Does an At-Fault Accident Affect My Car Insurance?

Feb 23, 2021 | Personal Insurance

Driving always comes with the chance of getting into an accident. Even if you consider yourself a safe driver, you must remember that there are many factors that can lead to that outcome. That’s the reason why most states require their drivers to have a minimum amount of insurance. They want to protect their drivers, and at the same time, not let the at-fault drivers get away unaccountable for what they caused. 

Causing an accident is a real pain, both in your body and your insurance. You will have to settle the repair costs of your car and the other driver’s vehicle. Your insurance will also take the brunt of paying the medical bills for their injuries if there are any. Worse, your insurance company may subject you to an increase in your premiums.

If you are reading this, it’s either you have been at-fault for an accident, or you want to prepare in case you cause one. To know how at-fault accidents affect your car insurance, you have to be aware of the surrounding factors first. Then, you may want to know of some ways to save money on your car insurance.

What is an “at-fault” accident?

The word is itself. The one at fault in the accident is the one who caused it. If the situation is clear-cut, then you can easily identify the one who is responsible. For example, you hit the rear end of another car. It is clear that you are the one who damaged their ride. However, things may get complicated in a collision.

Many people may get involved, blaming who they think is wrong. The situation will only get messed up. To make things straight, calling the police and the insurance company is the right move. They have their criteria in assessing the situation. Their criteria vary company by company. Insurance laws also differ state by state.

What is the difference between no-fault and at-fault states?

States can be classified into two: no-fault and fault. No-fault states don’t bother about who caused the accident. The drivers make a claim on their insurance providers for coverage, regardless if you’re responsible or not. One thing to do to know if you are living in a no-fault state is to check the insurance laws there. 

Generally, you need to have a personal injury protection policy in no-fault states. This policy helps reimburse you for the medical bills that you will have to pay, regardless of who’s the perpetrator. As for property damage claims, they are still paid by who is at fault. If you hit another car, then your insurance may still help pay for the other car’s repairs.

On the other hand, fault states give importance to knowing who caused the collision. The insurance companies and the police dig into the situation, determining who is at fault. For instance, you and another driver collided. Based on the investigation, you are the one responsible for the accident. Your auto liability insurance will pay for the other party’s damages. 

Note that the auto liability insurance pays for the other party, not you. Having collision insurance will protect you from paying for the repairs of your car. This insurance kicks in if your car is damaged in a collision, regardless of who’s at fault.

If the police are involved, how do they assess fault?

Assessing the situation needs a comprehensive view. The police will get the statements of both parties about what happened. They will also ask the witnesses for a comparison. Determining fault in a car accident will depend on the validity of the account. They may also look into traffic camera footage if there are any in the area.

Having recorded footage of the accident will speed up the process. It’s because a video serves as concrete evidence. After determining the fault, they will write a police report regarding the accident, though it may not include information about who’s at fault. Involving the police makes it possible to have a concrete account of an accident. However, if you’re the one at fault, it is evidence that may be used against you.

How do insurance companies assess fault?

Informing your insurer about an accident is the first thing that you should do. They will help assess the situation for you. Like the police, they will look into the crash and assess the damage. They will also interview witnesses and get an account of the accident from both drivers. Medical reports are also included. Then, they will determine who should take responsibility for what happened.

The fault may also be divided into both parties by percentage. For example, they may declare that you are 50% responsible for the crash. It means that both you and the other driver had been negligent. Insurance companies base their decision on the state laws’ definition of negligence. It happens when you aren’t able to exercise caution that others would have done in the same situation. The definition of negligence differs state by state. Below are some types of negligence.

Comparative negligence

This happens when you are assigned a percentage of fault for the accident. For example, you collided with another driver’s vehicle. The insurance adjuster, the one who investigates the claims, declared that you are liable for 65% of the damages. 

In this case, your liability insurance will pay for 65% of the damages, and the remaining will be handled by the other party’s insurance. This shows that you are assigned to pay for that amount, nothing more and nothing less. This also implies that you can recover the 35% remaining. 

Modified Comparative Negligence

This type of negligence doesn’t allow one to recover their losses if their contribution to the accident exceeds a certain threshold. For example, if you are more than 50% responsible for the accident, then you won’t recover any losses. Denver, Colorado applies the same 50% bar rule. 

For example, you are making a u-turn and you hit another car. The other driver is driving past the speed limits. They sued you, claiming that you are negligent in making the u-turn. If you are assigned 60% fault for the accident, then you will have to pay that percentage. However, you can’t recover your losses. 

Contributory Negligence

This type of negligence disallows you to recover your losses if you contributed to the accident in any way. Any responsibility for the accident will make it impossible for you to recoup your losses. Even a 10% fault will disallow you from getting compensation.

Even the slightest fault can hinder you. This leads to harsh results because it bars one from getting compensated for slight negligence. Below are the few states that still apply contributory negligence.

  • Alabama
  • District of Columbia
  • Maryland
  • North Carolina
  • South Dakota
  • Virginia

Why do my rates increase after an accident?

Here’s a situation: You have been in an accident 5 months ago. Today, you hit another driver’s car again. The first time you hit one, your insurance rate didn’t rise. Now, you are afraid that you will have to pay a higher premium. The answer is likely to be yes.

You are responsible for the increase in your premiums. Your insurance provider raises your premiums after an accident because you showed them that you can be risky. If you get into an accident now, then they may think that you can get into it again later. Being the one at-fault increases the chance of being subjected to a higher rate.

Of course, the increase isn’t permanent. It might go down after a few years. Even so, you may still find it unbearable. One idea to follow is to shop for a new policy. Another option is to lie low and not get into an accident. The accident record is a red flag for insurance companies, so getting into it again in a short time makes it worse.

The increase varies depending on the company. However, the average increase is 32%. In case you find the increase unfair, you may bring it to the court. They will examine and observe if it is indeed unfair, then take appropriate actions. 

What are the other factors that affect my rates?

You may want to know about the factors that affect your rates first. Only by knowing them will you be aware of how an action can be effective in lowering premiums. Insurers look into these factors before giving you a quote. 

Many factors determine the price of your auto insurance policy. It ranges from your demography to history, and other factors. The criteria may differ depending on the insurance provider. Even so, they contain a lot of similarities.

Everyone may not fit the necessary factors to get the lowest premiums. Even so, remember that they only charge you because of the information that you give them. You may not get the cheapest rate, but you can get the lowest offer that you can find by comparing quotes. Take note that there is no best offer, only the one that suits you the best.

Demographic factors

The word demography tells your sex, age, profession, location, and civil status. There are other things that can be counted as demography. However, the aforementioned are the ones that usually affect your car insurance policy. In case you are wondering why your premiums are so high, these factors are some answers. 

Your insurance company uses them as the basis for determining your “risk”. For example, you are a 21-year-old unmarried male driver and you have a monthly rate of $200. You are driving in an accident-prone area. When you asked your uncle, who is 45 years old, about his insurance policy, he said that he pays $180 per month. Here’s why.

Gender and age

Studies show that young male drivers get into accidents more often than young females. They are more aggressive because of their relatively young age. In comparison, old drivers tend to drive more safely. They are considered as veterans on the road, getting into accidents less.

Civil status

Civil status, also known as marital status, says a lot about you. Married people tend to consider their family before anything else. They drive more safely, at a lower speed, considering their family’s safety. 

Location

If you are living in an accident-prone area, then expect higher charges. This kind of place makes it riskier. You may be subjected to accidents more often. Thus, it will result in you making claims more often too. 

Profession

Sometimes, insurers also take your job into account. For example, delivery men can have discounts. They can be considered to have lots of driving experience and are less likely to cause an accident. 

Vehicle-related factors

Insuring a car, of course, takes the car into account. By gauging its value, they can give you a quote. They may consider how much money it takes to repair, replace, the parts’ availability, and many others. Having a safer car than most makes it possible for you to get lower rates. Below are some vehicle-related factors to consider.

Safety

Installing a lot of safety features in your car makes your rates lower. For example, you installed an airbag. It will help reduce your bodily injuries in case you get into an accident. Considering this factor, the claims that you will possibly make will be lowered. Thus, your insurer will charge you less.

The size of the vehicle

Generally, big cars get into accidents less than small cars. That’s why bigger cars cost lower to insure. Of course, the size of the engine is taken into account. Having a huge engine relative to the body size is more costly to insure, just like insuring a sports car.

The car’s age

An older car has a higher chance of getting totaled in an accident. The repair costs will likely exceed the true value of the car because of its age. On the other hand, new cars are less likely to get declared as totaled in an accident. However, they cost higher to insure because of the higher repair costs.

Likelihood of theft

Having a car that is more likely to get stolen increases your rates. Some particular cars tend to get stolen or, at least, their parts. However, installing an anti-theft alarm can potentially lower your premiums.

Driving factors

Of course, you are getting insured to get protected from possibly paying too much money after an accident. You, the driver, are responsible for that. That’s why looking into your records and history is important. It is the most essential factor that affects your insurance policy.

Driving record

If you had a bad driving record, then it will potentially increase your rates. It’s not only about the accidents that you’ve had. In case you have been issued a ticket for violating a traffic rule, then that’s also a blemish in your history. Keeping a clean driving record is a must.

Driving activity

Your insurer also takes into consideration the length or distance that you usually travel. As we all know, the longer you are on the road, the more danger that you can encounter. If you are only driving for a short distance, then you will likely get a lower premium.

How can I save money on auto insurance after an accident?

Your rates increasing doesn’t mean that you should just sit there and do nothing about it. At some point, you may find that in the long run, the increase becomes unbearable. That may be the time that you should look for ways on how to save money on auto insurance.

It is understandable that all of us have varying financial circumstances. Some may have a surplus of it, while some have an insufficient stash of money. Regardless, one thing common is that many of us are trying to save money. There are many existing ways. Exploring what is possible for you to make can help you pay less.

Improving your credit

Credit scores are ratings that prove that you are creditworthy. These apply to a wide variety of services. For example, when paying your credit card, your bills, and your insurance, they all add to your credit history. Now, how do they determine your credit score?

If you are paying on time, then you will have relatively good credit. Another situation is when you pay your credit card. Staying within the limits can show that you are creditworthy. These only prove that you will be able to pay your insurance on time. Hence, the low charges.

Increasing your deductible

Deductibles are a set amount of money that you pay when making a claim. For instance, you filed a claim worth $1500. If you have a deductible of $500, you will receive $1000. That means the 500 dollars is shouldered by you.

Usually, having higher deductibles results in lower rates. However, you should be aware that the coverage still benefits you. For example, you are covered by comprehensive insurance. The claim is $600. You have a deductible worth $500. That means you will receive $100 only. Compared to your rates, you may be paying for something that doesn’t benefit you.

Getting discounts

One of the most common ways to save money on car insurance is to ask if there are discounts. Some companies have certain criteria for determining whether you qualify for them. These include discounts from bundling policies, to being a defensive driver. There are many others so you should ask your insurer about what discounts you can avail of. Below are some discounts that you may get.

Bundling policies

Getting insured from the same company in different kinds of insurance can result in a reduction in your premiums. What do you mean by “different kinds”? For example, you got your homeowners insurance from a certain company. Getting car insurance from them may lower your rates.

Defensive driving courses

Taking these courses implies that you are a relatively safe driver. These courses teach you how to maneuver your car defensively, making you ready for any accident. Drivers who have taken these are less likely to be in an accident. Ask your insurer if they also offer the same discount in case you took this course.

Safe driver

You will be considered a safe driver by having a clean driving record. Not getting into an at-fault accident for at least a few years implies that you drive safely. Also, making no violations or receiving no tickets for speeding also proves that you are not risky. As we all know, high-risk drivers are subjected to higher premiums. 

Good student

Having a B grade or above can make you eligible for discounts. Being a good student implies that you are alert on the road and considers safety first. You are also less risky because you received a proper education.

Anti-theft and safety features

Installing anti-theft alarms will make your car less likely to be stolen. A certain type of insurance covers stolen cars, namely comprehensive insurance. This coverage helps pay if your car is damaged by vandals, falling tree branches, and damages caused by weather. It also helps pay if your car is stolen. That’s why having an anti-theft alarm or other car safety features can lower your premium.

Having an airbag also helps reduce your rates. Your injuries will be reduced in case you get into an accident. Thus, your claim will also be lower. Insurance companies grant discounts to those who have one.

Lowering your coverage

In most states, there is a minimum amount of liability insurance required. This insurance will help pay for the damages made to the other party in case you are at fault. You have to remember that driving around without one is illegal. Of course, there are other types of coverage available. Two of these are collision and comprehensive insurance.

You can lower your coverage levels on these two by considering some factors. Consider the age of the car, as well as its actual value. If the repairs cost higher than the car’s true value, then lowering your coverage or dropping them may be a wise choice.

Shopping for a new policy

There can be many companies that offer insurance in your area. Shopping around will help you find the best quotes by comparing their offers. You may want to choose one that has low rates but has good services. Even if you didn’t have an accident recently, shopping around is still a good idea.

However, you have to take note that their quotes will be higher. That’s because you have a record in your driving history. Insuring a driver who had an accident poses risk for the insurer. Worse, they will reject you. Even so, you may still find their offers lower than your current policy. 

Before switching companies, you may want to consider if your present insurer will offer you discounts in an attempt to make you stay. After calculating them, compare it with a quote that a potential new company offered you. It is best to choose the one that will benefit you the most.

Changing your car

There are particular brands and types of cars that are relatively pricey to insure. You may want to consider insuring a low-cost car. These cars cost lower to repair. You may also consider “safe” cars. These cars are typically the ones less likely to cause an accident. By doing this, you will be subjected to lower premiums. 

Of course, you need to consider if insuring such a car is worth it. You may also choose which types of coverage you want to get insured. However, here’s a reminder: it doesn’t depend on the car, it depends on the driver.

How does accident forgiveness work?

You may have encountered the term “accident forgiveness”. This is a way to prevent having higher insurance rates. As the word “forgiveness” implies, if it’s your first time to get into an at-fault accident, then your insurer may not surcharge you. They will also not let it affect your driving record.

The rules and regulations for accident forgiveness differ depending on the company. They may offer it to you when you are getting insured. Some companies also offer it as an endorsement. Even so, you should ask your agent if you qualify. It’s worth it to ask because an increase in your rates is highly possible after causing an accident.

Will my credit score be affected if my rates increased?

The answer is no. It is the other way around. As mentioned above, your credit affects your insurance rates. If you fail to pay your insurance, making it lapse, then that’s the time where your credit score gets affected.

Even if your rates increased, you should never let your insurance policy lapse. It would result in higher premiums in the future, as well as a bad credit score. You may follow the tips mentioned above to reduce your rates. Thus, making the possibility of your insurance lapsing smaller.

Final Say

Causing an accident will never be considered a fortunate thing. However, knowing how to lower your premiums after causing one makes you a lucky driver. At Advantage Insurance Solutions, we can offer you the best quotes that you can find. Ask us about auto insurance in Denver, Colorado (or any other state), and we will do our best to cater to your needs. Call us today!