Auto insurance covers you in case of an accident. However, if you make a claim against your insurance, your rates will most likely go up. Even if you are not at fault for the accident, your insurance company might raise your rates based on your driving history.
If you weren't at fault in the crash and you have a good driving history, your rates likely won't rise. However, if you had an at-fault accident in the recent past--within the past two to three years--your insurance rates may go up significantly, according to Car Insurance Rates.com. Even though you were not at fault for this accident, your insurance company may consider you accident-prone because you had two accidents relatively recently.
If you are at fault for an accident, your insurance company may raise your rates based on its surcharge schedule. The surcharge schedule lists the percentages the company uses to determine rate increases after an accident. Usually, the surcharge is a percentage of the base rate. For example, if you pay a premium of £65 per month prior to an accident, and the company charges a surcharge of 40 per cent after an accident, your rate increases to £91 after one accident.
Insurance companies set rates based on their calculation of your risk--how likely you are to get into accidents. Thus, if you have a lot of accidents, even if they are all no-fault, your insurance company may raise your rates. Similarly, if you get speeding tickets, the company may raise your rates. If you are deemed too high a risk, your company may terminate your insurance altogether, as sometimes happens after a DUI or reckless driving conviction.
You should check the surcharge schedule on a proposed insurance policy before signing. Some policies may have cheap premiums for customers who have perfect records but raise your rates significantly or even cancel your insurance if you have any type of accident. If you have not had any accidents in the past three to five years, it might be best to go with a more expensive provider and get a discount for having a good driving record.