Low Cost Insurance
Providing You Affordable Insurance Options
Click here to learn more
Free Policy Review!
Click or Call Now

How Car Accidents Affect Your Car Insurance Rates

how car accidents affect your car insurance ratesYou’ve probably heard of “Accident Forgiveness” or “Good Driver” discount when shopping for insurance. Although these discounts make for great advertising, they can help you become a better driver as well. This is because car accidents can greatly impact your annual insurance rate. Experiencing an auto-related incident, or lack thereof can be the difference in how much money you save on your policies.

However, you can't be totally sure what’s considered a car accident and what isn't in the eyes of your insurance company so we'll explore what counts as an accident, as well as the different factors that affect your insurance rates.

The Rating Factors

Auto insurance premiums start with a base rate that’s based on a broad category of drivers. For example, female drivers living in Texas, male drivers living in Iowa, etc. The insurance company will look further into the individual’s risk or rating factors to determine the person’s probability of filing a claim

The main determining factors for auto insurance include:

  1. Age
  2. Gender
  3. Marital status
  4. Geographical location
  5. Credit history
  6. Claims history
  7. Driving record
  8. Type of vehicle
  9. Vehicle use
  10. Annual mileage
  11. Years of driving experience
  12. Deductibles and coverages
  13. Previous insurance coverage

Each insurer looks into their own data claims and weighs each factor differently. Because of this, insurance premiums vary from person to person.

What Counts as an Accident?

Determining what is considered an accident will also depend on your insurance agency. For some, an accident can only be called as such if the cost of covering the damage is at $750 or more. The total cost should be the combination of the person’s property damage liability coverage and liability coverage.

The rate increase is also affected by the one who committed the accident. If you’re at-fault, you can expect to see a rise in your premium. This hike is known as a surcharge, which is a penalty your insurance agency tacks onto your premium for getting into an accident.

If you’re not responsible for the accident, it’s still possible for your insurer to increase your premium but at a lower rate. However, there are insurance companies that won’t add a surcharge unless you’ve been in multiple accidents.

When shopping for car insurance, always remember to ask your insurance agent about what situations determine a car accident. Also, ask him/her how your premium will be affected whether you’re at fault or not. Doing so will help you find insurance coverage that suits your budget.

Interested in purchasing auto insurance? Contact Low Cost Insurance today. Our company has been providing excellent auto coverages for drivers in Houston and Cypress, Texas. We’ve helped countless drivers feel financially secure so give us a call at 281-612-7178 so we can discuss your options.