When you have an accident it will stay on your insurance record for several years. If the accident was your fault the insurance company may surcharge your policy during that time, thus increasing your rates by 25 per cent or more.
Significance of Accidents on Insurance
There are many different factors that can affect the premium you pay for car insurance, one of which is an accident. The rates vary from state to state, but if you have an accident that is your fault or even one for which the insurance company can take no recourse, such as a collision with a large animal, it will affect the premium you pay for auto insurance.
How Long Will an Accident Affect Your Insurance Premiums?
The length of time that an accident stays on a person's driving record varies by state, but it's usually between three and five years. Insurance companies also have their own underwriting policies, but for the most part they do not consider accidents more than three years old unless it involves a drunk driving conviction or an accident in which one or more people died. In some states accidents remain on a person's driving record indefinitely but whether an insurance company will make use of those figures is at the discretion of the individual carrier.
Not All Accidents Affect Your Insurance Rates
Not all accidents have an effect on your insurance rates. In most cases, if the accident was not your fault the insurance company will not raise your rates. However, do not assume this is the case with all carriers--you should question any carrier before you purchase an auto insurance policy.
If you are in an accident that is your fault, most insurance companies will surcharge your policy 25 per cent or more for at least three years following the accident. Some carriers do have an "accident forgiveness" period for the first accident, but again, this is at the discretion of the insurance company. Collisions with emergency vehicles (police cars, ambulances, and fire trucks) are usually considered non-chargeable accidents because these vehicles are allowed to disobey traffic signals in certain circumstances.
Ask Questions Before You Buy Insurance
Because of the differences that may exist among insurance companies you need to know how your accident will affect your premiums in your state. Do not assume all states or insurance companies have the same policies regarding accidents. Know what to expect and how your insurance company will view the situation.