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How Much Does Your Car Insurance Go Up After Your First Accident?

Posted April 12, 2016 | Car,Vehicle Accidents

The bad news is that your first accident can drive up your auto insurance rates significantly.  The good news is that it doesn’t necessarily have to.  It all depends on factors like the vehicle you drive, how serious the crash was, and the type of coverage you select.  If you were recently injured in a crash or collision, make sure you don’t get taken advantage of by an insurance company — talk to an experienced Philadelphia car accident lawyer about your options for getting compensated. 

Which Auto Insurance Companies Have Accident Forgiveness?

You had a perfect driving record — until today.  Now, you’re worried about how much your premium is going to increase.

But before you get too stressed out, read through your policy carefully: there may be some good news written into its provisions.  Many auto insurance companies offer qualified drivers a feature called “Accident Forgiveness,” which will prevent your premium from increasing after your first crash.  If you’re an uninsured driver in Pennsylvania and are currently in the process of shopping around for coverage — in which case, you should familiarize yourself with the new minimum auto insurance requirements in Pennsylvania — Accident Forgiveness may or may not be a feature you want to prioritize.

While this may change in the future, the following companies offer Accident Forgiveness as of early 2016.  Since policies vary, be sure to put in your research and compare options thoroughly before making a decision.

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  • Allstate — “Your rates won’t go up just because of an accident and you’re protected even if it was your fault… Allstate Accident Forgiveness starts the day you sign up.”
  • GEICO — “If you qualify for GEICO’s Accident Forgiveness, you won’t be surcharged for the accident and you’ll get to keep any of the good driver discounts you’ve earned.” The fine print specifies that “eligibility is determined by your specific policy type, as well as your state laws and regulations.”
  • Liberty Mutual — “With Accident Forgiveness, your price won’t go up due to your first car accident. Accident Forgiveness comes standard with your policy at no extra charge to qualifying customers.”
  • Nationwide — “Nationwide extends Accident Forgiveness to other drivers on your policy – including teen drivers. If you have at least five years’ driving experience without an at-fault accident, you could save up to 10%.”

If you have any questions related to auto insurance coverage, your DMV (Department of Motor Vehicles) is always a good place to start.  Yes, the lines can be a drag — but plenty of useful forms and information are available online, too.

Factors That Can Impact Your Insurance Premium if You’ve Never Had a Car Crash

If you don’t qualify for Accident Forgiveness, you may find yourself stuck with an increased premium after your first crash or collision.  Citing an InsuranceQuotes study, CBS News in 2015 reported a 41% average cost increase after filing a single claim for $2,000 or more.  (If the driver had a second accident and filed another claim during the same year, the rate increased by a staggering 93%, nearly doubling.)

This data is less than comforting for motorists.  However, you may have a better outcome.  The extent to which your rates will increase depends on a few variables, such as:

  • The model and age of your car. Depreciation, ease of finding replacement parts, and other factors can have an impact on costs.
  • The severity of the accident and resulting injuries/property damage. For instance, was the vehicle completely totaled?  Or did the windshield just crack slightly?
  • Whether you live in a no-fault insurance state. Pennsylvania and New Jersey are both no-fault states, which means your insurance company must pay for a portion of your accident no matter which driver was at fault.  This places the insurer under greater pressure to recoup costs, which unfortunately means you may face greater rate increases than you would as a fault state resident.

Other than seeing a spike in your rates, you might face some other negative consequences as well.  For example, you may lose some of the discounts you were previously entitled to (though GEICO’s policy lets drivers avoid this penalty to an extent).  If you caused the accident by driving while intoxicated or under the influence of drugs, your insurer may decide to drop you altogether.

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Contact Experienced Philadelphia Car Accident Lawyer Brent Wieand for Help

Regardless of what sort of policy you have, or what type of collision caused your injuries, you should speak to a personal injury attorney for help negotiating a fair settlement with the insurance company.  Don’t let yourself fall victim to bad faith insurance tactics.  Call Pennsylvania truck accident lawyer Brent Wieand at (877) 654-3887 right away to set up a free and confidential legal consultation.  You won’t be charged any fees unless Brent makes a recovery for you.

***Disclaimer: This article is for informational purposes.  It is not legal advice and should not be used as legal advice.***