Reduce your car insurance rates after an accident by following expert advice through discounts, coverage adjustments, and shopping. Real ways to cut your premiums and get back in control of the cost.
A crash can be traumatic. Not only does it take its toll on you physically and emotionally, but it also takes a heavy toll on your wallet in the form of higher insurance premiums. After you have an accident, the costs of insurance go up rather substantially-sometimes upwards of 20% to 50%. All these, however, can be kept at a minimum with the proper strategies to keep your insurance expenses manageable. In this article, we find ways that you can manage and cut down car insurance costs following an accident.
1. Understanding how an accident affects the cost of insurance premiums
The first thing that will most likely happen after an accident is that insurance premiums become more costly. This is because you are now considered one of the high-risk drivers by insurance firms. The exact hike does depend on several variables, which include how severe the accident was, what your unpaid driving record resembles, and whether you were at fault. Generally speaking, a surcharge for an at-fault collision will continue to be chargeable to your policy for three to five years. Learning this is the first step in figuring out how to save and pay less for car insurance.
2. Review Your Policy and Look for Discounts
One of the initial steps that you have to take right after an accident involves perusing your current policy for the discounts that you have already or could add. Some of these options include:
- Accident Forgiveness: Some insurance companies have accident forgiveness, which ensures that your first at-fault accident will not increase your premiums. If your current policy already has this in it, then this would be cheaper. Otherwise, consider switching to an insurance company that offers the same.
- Bundle Policies: You can save on auto insurance by bundling with other types of insurance, such as homeowners or renter’s insurance. Most insurance companies give a discount for bundling multiple policies together.
- Safe Driving Courses: Some defensive driving courses offer you discounts even following an accident. These courses just prove your commitment to driving safely, and that commitment on your part is often a way that an insurance company can reward you with lower rates.
- Good Driver Discounts: While an accident might temporarily drain you from this discount, keeping a clean driving record moving forward can help you regain eligibility for discounts like this in the future.
3. Get Insurance Quotes
Shopping for insurance is a very important part of what to do after an accident. Because different companies assess risk differently, some may give you more competitive rates despite your accident history. Use services like Insurify, The Zebra, or NerdWallet to get multiple quotes in an easy and quick way. This can help lead you to a better deal and ensure you’re not overpaying for insurance.
4. Adjust Your Coverage Levels
If your premiums have gone really high after an accident, it might be time to tweak your coverage levels:
- Increase Your Deductible: Increasing your deductible is one of the ways to a lower premium. A deductible is the amount of money you would have to pay out of pocket before your insurance starts paying. A higher deductible equates to a lower premium, but just ensure you can afford the increased out-of-pocket expense if you should file a claim.
Drop optional coverage such as roadside assistance, or rental car reimbursement if you look to lower your cost. But be careful so as not to drop essential coverages like liability or collision, as those are key to your financial protection.
5. Usage-Based Insurance (UBI)
Usage-based insurance is increasing in popularity, with UBI programs offering personalized premiums based on how you tend to drive:
Pay-Per-Mile Insurance: When you are not driving much, switching to a pay-per-mile policy can save money. These policies charge a base rate plus a per-mile rate and are perfect for low-mileage driving.
Telematics Programs： It is offered by some insurance providers, a telematics plan traces the way you drive either through a mobile application or by installing a gadget in your car. Good driving saves you more cash and not only offers you lower rates before an accident but also post-accident since insurance providers give due rewards to those displaying consistent and careful behavior.
6. Better Your Credit Score
Most states permit insurance companies to use your credit score to determine your premium. The better your credit score, the lower your insurance rates may be. If your credit score took a hit recently, here’s how you can improve it:
- Pay Bills on Time: It’s one of the most critical factors for your good credit score.
- Lower Credit Card Balances: One of the ways to increase your credit score is by ensuring that the balances on the credit cards are low.
- Correct Errors and Mistakes: Periodically go through your credit report and look for errors. Correct the errors and mistakes you come across; they are some of the factors that contribute to increasing your score, hence reducing some insurance costs for you.
Talk to Your Agent: Oftentimes, it is open communication with the agent that leads to customized discounts or payment plans capable of lowering costs. They might grant you a lower rate, especially if you have been their loyal customer for quite some time.
- Look for Loyalty Discounts: If you’ve been with an insurer for a lot of years, you should check for loyalty discounts. Some companies offer reduced rates for long-term customers even after an accident.
8. Consider Changing Insurance Companies
If your current provider won’t work with you on lowering your premiums, then it may be time to change. Search out other companies that can provide competitive prices for drivers who have accidents on their record. However, before making any switches, research potential new insurers to ensure they maintain good customer service and a good reputation when handling claims.
9. From Now On, Drive Safely
The best way to lower your cost of insurance in the long run is to avoid future accidents. Thus, follow the traffic laws, keep your attention, and always drive defensively. Most insurance companies will grant you accident-free discounts. If your driving record has been good, you can usually get a discount for three to five years consecutively. Over time, that can give you very substantial savings on your premiums.
10. Regularly Review Your Insurance Premiums
Finally, be in the habit of reviewing your insurance regularly, more so when it’s nearing renewal time. You will be able to review whether you have any unnecessary charges. You can then adjust the coverage to best fit your needs. If anything has changed-for instance, you drive less or you have paid off a car loan-make sure your insurance reflects this to reduce the premium.
Conclusion
Lowering your car insurance costs after an accident takes some level of proactivity. By knowing how the accident will affect your premium, any available discounts, altering the amount of coverage you have, and considering new insurance options, you’ll be better equipped to manage and lower your insurance costs. More importantly, one needs to keep informed, periodically review policy changes, and increase and decrease policy elements as necessary to carry the lowest rate possible.
Frequently Asked Question
1. How much will my car insurance increase after an accident?
A car accident can increase your insurance rates by 20% to 50%, depending on the severity of the accident, plus your driving record. The exact percentage will depend on an insurer and state laws.
2. How to decrease auto insurance after an accident?
Yes, you can lower your premium by looking for discounts, increasing your deductible, checking for better rates, and even considering usage-based insurance programs.
3. What is accident forgiveness in car insurance?
Accident forgiveness refers to the option given by some insurers whereby they will not raise the premium on the occurrence of the first at-fault accident. It can be a valuable benefit to reduce long-term costs.
4. How long does an accident affect my car insurance premiums?
– Depending on your insurance company and state’s laws, an at-fault.