Does a Crash Automatically Mean Your Insurance Cost Will Increase?

When shopping for a car insurance, you should investigate the company’s surcharge schedule alongside service, reputation, and price of the insurance company. A surcharge schedule is a pre-ascertained premium increase that is charged in the event you are in an accident.

Getting to Know the Surcharge Schedule

If you were never involved in a car crash in the last ten years, but happened to be in one only last week, your insurance premium may or may not go up. If it increases, it could vary with the insurance company, with the range being anywhere from eight to sixty percent. Some insurance firms could waive your first crash or accident, especially if the crash caused little damage. According to several car insurance experts, taking accident surcharges into consideration is vital when choosing an insurance policy.

The policy surcharge is determined after the accident. Car insurance firms furnish surcharge rate information to state insurance departments as a component of the natural filing process. Even if the surcharges are approved, it could be investigated if consumers lodge complaints with the state department, where the state would review the legitimacy of the surcharge.

Surcharge information can be found on the surcharge schedule given by the insurance firm. The document comprises percentages and points, and you would invariably have to compute the increases by yourself. In certain states, insurance firms are required by law to furnish a copy of the surcharge schedule.

Car Insurance Premium Increases

So, the question remains, does a crash automatically mean your insurance costs will increase?

The increase is based on several factors. As per the ISO (Insurance Services Office) standard, the premium is increased by twenty to forty percent of the base rate post a crash. However, premium increases could go above forty percent based on the scenario. The average increase in the rate of insurance could vary across states—California, Delaware, and Massachusetts are states known for some of the highest increases. Fortunately, most other states are close to the twenty to thirty percent range.

Companies usually ascertain the surcharge considering the premium paid prior to an at-fault accident. Your location, driving record, age, amount of coverage, type of vehicle, and experience as a driver would impact the percentage increase in insurance premiums as well. Some states even factor in credit rating.

If you were not the at-fault driver in the accident, you likely have sustained expenses and injuries due to the crash. You should get in contact with a Rockford car accident lawyer to seek compensation for your expenses, damages, and pain and suffering.

Increase in Rates Is Subjective

Based on your circumstances, your after-accident premium could increase marginally or significantly. For instance, you file a claim just before your birthday, but on your birthday, you are in a new age bracket that would decrease your risks and premiums. Your rates skyrocket, but if you had waited until after your birthday, the change may have essentially remained unchanged.  

If you filed a claim and purchased a more expensive vehicle before renewal date, you would likely see a major increase, which could be even double. At the time of renewal, your insurer would review your claim, payment, driving history, and historical changes in policy to ascertain your risk level.