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Accidents happen. It’s just a fact of life. There’s a reason we have so many insurance policies (homeowners, auto, life, etc.). When accidents occur, you want the peace of mind that comes with knowing your insurance provider will cover the costs for any resulting injuries or property damage.
Unfortunately, when you are found to be at fault for an automobile accident, there’s a good chance you’re going to suffer some kind of penalty as a result. Even though you won’t necessarily have to pay the costs associated with the accident, you could end up paying in a variety of ways after the fact.
Most insurance providers reserve the right to increase premiums as a result of accidents because of increased risk factors. Some may even elect to cancel your coverage altogether following an accident. Some states have laws in place to curb immediate penalties, but when your policy renewal rolls around, you should anticipate higher premiums, at least for a short period of time.
What if you don’t have the funds in your budget to cover such increases? Is there anything you can do to reduce your auto insurance or stop rate increases following an accident? Here are a few things to consider.
1. Start with the Right Insurance
Did you know that some insurance providers offer policy features like accident forgiveness? There are usually caveats surrounding this feature, but the basic gist of it is that you won’t be penalized for your first accident, even if it’s your fault.
Not every insurance provider offers this feature, and some may have requirements, such as being accident-free for a certain amount of time after you purchase your policy or since your last accident, just for example. However, starting out with a provider that at least offers the opportunity to gain accident forgiveness could just stop your rates from increasing after your first accident.
2. Report all Accidents
Okay, this might seem counterintuitive when it comes to reducing rates. Every accident you report could result in your insurance provider raising your rates or dropping you as a client, perhaps not immediately, but when it’s time to renew your policy.
That said, a failure to report an automobile accident for which you are at fault could lead to much more serious consequences. Even if the accident is only minor and you agree to pay out-of-pocket for any costs for injury or damages to others involved, there’s nothing to stop them from filing a claim at a later date, or even filing a lawsuit.
Should this occur, your own insurance provider would almost certainly be well within their rights to refuse to honor the policy, leaving you footing the bill not only for damages, but also for related legal costs. If you’re lucky enough to receive coverage, you can be sure of seeing a premium increase or getting dropped.
3. Traffic School
Some states offer traffic school as a way to avoid certain penalties associated with moving violations or traffic accidents. Most people haven’t had to study driving laws since they took driver’s education as a teen.
You might have perused the Driver’s Manual from the DMV before a license renewal requiring a written exam, but if you’re like the average driver, it’s been a while since you’ve tested your knowledge in this area. In the meantime, you’ve been accumulating driving experience, but a refresher course on the rules of the road could definitely be in order.
At least, this is the basic principle behind traffic school, and probably the main reason why it is an option to avoid penalties following collisions and moving violations. You’ll have to check with your insurance provider, but you may be able to avoid an increase in premiums by taking traffic school following an accident, depending on the circumstances.
4. Adjust Your Policy
There are a number of adjustments you can make to your policy to equalize costs following an accident. Even if you are unable to avoid an increase in premiums with accident forgiveness, traffic school, or other measures, you don’t necessarily have to end up paying more than you’re used to.
You can find ways to reduce costs in other areas as a counterbalance to increased premiums. If you’re determined to drive with extra care following an accident, for example, you might consider increasing your deductible or decreasing coverage temporarily to offset additional premium expenses.
If you don’t necessarily want to give up coverage for a year or more until your rates are once again reduced, there are other options. You might ask about discounts you have yet to take advantage of, such as bundling multiple policies.
Why pay more for other insurance policies or roadside assistance from third-party vendors when you can save money by purchasing these services from the same provider? If you have yet to consider what you might save through bundling and you’re interested in cutting costs following an increase in premiums due to an accident, now is a great time to look into this option.
5. Hire an Auto Insurance Broker
If your insurance premiums increase due to an accident, or worse, you find yourself uninsured, it’s time to start seeking auto insurance quotes. This can be a dismal proposition, especially after you’ve just suffered an accident. After all, how are you going to find a new insurance provider that will take you following such an event?
You could spend a lot of time shopping around on your own, approaching a slew of providers to find out if they’ll even take you, much less the amount you’ll have to pay to secure a new policy. However, you might be better off hiring an auto insurance broker to do the heavy lifting for you.
A broker is different from an insurance agent. Whereas an agent works for one insurance provider and represents that brand, a broker works for you. This professional’s job is to secure the best policy at the best rates for you, the client.
Thanks to connections with several providers, your broker can gain access to deals you couldn’t hope to find on your own. If you’re looking to reduce rates following an accident, hiring a broker to help you find a new policy could be your best bet.