Many drivers hesitate whether they should get a hold of their insurance company after an accident because they dread an increase in auto insurance rates. The insurance rates almost always go up (with few exceptions), but it does not mean that they really skyrocket. Actually your insurance company takes into consideration several factors that determine whether and how much your rates will grow.
What factors affect the increase in insurance rates?
- whose fault the accident is. Reckless driving will almost certainly result in a towering jump in your rates.
- how much the insurer has to pay out after the accident. You may have a significant increase in premiums if your company had to pay out a lot. However, an increase often occurs even if your provider did not pay anything. Why? That’s because the accident goes in your record and the insurer automatically considers you not a safe driver.
- how severe the accident is. This is the most important factor.
- the type of insurance you have. It should be pointed out that liability insurance is not meant for covering your car, it provides coverage for other cars that you damage in an accident. For this, you need collision insurance. So, if collision coverage is not included in your policy, and you hit a deer, a fence etc., you will have to pay any bills involved on your own.
- one more extremely important factor is whether you are in a no-fault state. In no-fault states your provider will have to pay out even if you are not at fault. In this case, the insurance company is very likely to increase your rates in spite of the factors mentioned above (they will still apply to a certain degree).
- whether you have a good driving history. This factor is especially important if you have been with the same company for several years.
- whether your policy includes accident forgiveness. Every insurer has his own understanding of accident forgiveness, but typically this option refers to small claims. Refer to your policy to find out the standards your provider has.
Taking into consideration all these factors, you might be tempted not to report the accident at all. However, it’s not always the best decision.
When is it a good idea not to report a single accident?
The first thing, you need to understand whether you have damaged someone else’s property. If yes, try discussing the issue with the owner. Will he agree to take some money from you and not to report the accident to the police?
Are you going to file a claim? If yes, you certainly need to inform your insurance provider immediately.
Is there another driver involved? If he will file a claim, your insurer will find out about the accident, anyway.
It is also possible, that the accident will be reported to the police and become a matter of public record. This means, that your insurer will find out about the incident, whether you report it or not. For instance, if you hit a road sign and decide not to report it, you may still be caught. In this case the problem will be much more serious than if you had reported the incident yourself.
One more possibility to consider. If you do not repair the damages after a single car accident and then have one more accident, the insurer has the right not to cover it.
To sum up, here are the cases when it makes sense NOT to inform your insurer about a one-car accident:
- you are not injured or you are prepared to pay the medical expenses, as well as the damage to your car out of pocket.
- the costs of repair are not much over the cost of your deductible. If in doubt, try to obtain an estimate of the damage promptly and only then contact your insurance company.
- there is not much damage to someone else’s car or other property and the owner is not going to file a claim.
Do not hesitate to file a claim if anyone is injured (especially if you can be found at fault) or the costs for repairs or medical expenses are greater than you can pay.
How long will I have higher premiums?
The answer depends on the type of accident, yet in most cases it is not less than three years. However there is a way to make this period shorter. Consider switching the provider. The insurer who did not have to make any payments to cover your claim is more likely to offer you lower premiums than the one who had to pay. Also, check whether you have any reasons for car insurance discounts – it may help you reduce the cost of the policy.