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How Does Car Insurance Work After an Accident


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You already know you are required to have insurance, but you may be wondering how exactly it works. 

Just like any type of insurance, you’re hoping you don’t have to use it. You can think of it as a financial safety net in the event something bad or unplanned happens – like a car accident. 

This page will provide you with an overview of how you can expect your car insurance to work after you’ve been involved in a collision. 

How Does Car Insurance When You Get in a Collision

After you’ve been in a car accident and have taken care of the immediate next steps is when your car insurance policy starts to come into play. 

Remember, immediately following an accident you should:

  • Make sure everyone involved is okay, and contact emergency services if necessary.
  • Contact local law enforcement, if necessary.
  • Get the vehicles out of the road, if possible and safe to do so.
  • Document and photograph the accident. 
  • Exchange information with the drivers involved.
  • Gather any witness information.

After the above steps have been taken care of, it’ll be time to get your insurance company involved. 

When you’ve been in a collision, you’ll need to file a claim with your insurance company. 

Once your accident claim has been filed, your case will be assigned a claims team, or insurance adjusters. The other driver’s insurance company will be going through the same steps. 

Once the claim has been filed and your insurance company is one the case, the following will occur:

  • The claims adjuster will refer to the policies of the drivers involved in the crash. 
  • They’ll review evidence and documents of the accident. 
  • They’ll use the state’s negligence definitions and insurance laws to determine who is at fault for the accident. 
  • Once fault is determined, they’ll calculate how much will need to be paid out for the claim.

The amount of money you’ll receive, or if you’ll receive any money at all will depend on the state you’re in and:

  • The state’s legal definition of negligence in a car accident. 
  • Whether it is a No-Fault or Tort insurance law state. 

Car Insurance Rates After an Accident

Whenever you are involved in an accident, your car insurance premiums can go up. 

The more severe the accident (i.e. accidents involved expensive damage or serious injuries) can cause your rates to go up significantly.

Why does this happen?

Well, if you get into a crash or accrue traffic violations, your insurance company will increase your individual “risk” factor that’s used to calculate your insurance premiums. 

The riskier of a driver you are perceived to be, the higher your car insurance rates will increase.

How Long Does a Crash Stay on Your Record

Luckily, that minor accident is not going to stay on your record forever. 

Overtime, past collisions will no longer affect your insurance costs.

In general, most insurance companies keep a 3 to 5 year history of your driving record and accidents. 

If you are able to maintain a clean driving record and stay out of traffic accidents, your past collisions will no longer make your rates go up.

How to Lower Insurance Rates After an Accident

If your car insurance is too expensive after a recent accident, there are a number of things you may be able to do to lower them.

First, before you even get behind the wheel and are shopping for insurance, you can check to see if they offer an accident forgiveness program. A policy with accident forgiveness can help keep you rates lower if you’ve been in a crash. 

Next, you can elect to take a defensive driving or traffic school course. Many insurance companies will offer insurance discounts when you complete an approved course. 

You can also shop around for a new insurance policy. If your current provider is getting too expensive, it’s a good time to compare quotes to see if you can save – even if you’ve recently been in a crash.

Finally, you can wait it out. Car accidents won’t affect your insurance rates forever, so if you can avoid crashes, tickets, and keep a clean driving record for a few years, you should see your rates start to decrease. However, you still may need to get a new quote to make this happen.

What happens if you get into a car accident without insurance?

Driving without car insurance is an extremely risky proposition. 

First, all states require you to prove either financial responsibility or car insurance in order for you to register a vehicle and drive it on public roads. 

If you fail to maintain insurance or are involved in a crash without insurance:

  • Your driver’s license may be suspended or revoked.
  • Your car registration may be suspended.
  • You may go to jail.
  • You may have to pay fines.
  • You may be personally financially responsible for any damages or injuries that occur due to the crash.
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