Car insurance rates are calculated so that your insurance provider can pay for
damages to your car and people while still making money from the service they provide.
Insurance companies lose money any time they have to repair or replace your vehicle, which means that the more likely they think a particular situation will cost, the more money they’ll generally charge you
after an accident.
Because of this, insurance companies monitor your
driving history and adjust your premiums based on how frequently you’re involved in collisions.
Of course, not all accidents are created equal. Some are more severe than others, and some aren’t your fault. Each insurance company adjusts their rates differently, but in general, they treat accidents similarly and adjust your prices based on the type of accidents you’ve been in.
There are six major types of accidents, and each has a different effect on your insurance rates.
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Single car accidents and insurance
A single car accident is one in which you crash your vehicle but don’t hit another car. If you hit a tree, or simply drive off the road, you’re in a single car accident.
Single car accidents don’t usually spike your insurance rates too much since your insurance provider doesn’t have to pay for any other car’s damage. However, such an incident will still likely bump your rates. A serious single car accident will raise your rates a larger amount.
After all, you caused damage to your vehicle, and the insurance company has to pay out.
Minor multi-car accident with fault
Most people are involved in a few minor multi-car accidents in their lives, such as fender benders and parking lot collisions. If you’re the responsible party in a minor multi-car accident, you can expect to see a slight increase in your
car insurance premiums.
However, because it’s unlikely that either vehicle is seriously damaged, your premiums usually won’t rise very much. However, if you are frequently involved in multi-car accidents, even minor ones, your premiums could ultimately get very pricey.
Major multi-car accident with fault
A multi-car accident in which you are the responsible party will raise your car insurance rates dramatically. Not only does such an accident cost your insurance provider a lot of money in repairs, but it shows on your driving history that you have a past that involves serious accidents.
Over time, a
clean driving record can lower your rates again, but there’s no way around the big hit that your premiums will take if you cause a serious multi-car accident.
DUI-caused accident will hike your premiums
Far and away, the type of accident that most impacts your auto insurance is one in which you receive a
DUI. A DUI in and of itself will skyrocket your car insurance prices, but a DUI that leads to an accident will be even more severe.
Because driving impaired is so dangerous to not only you, but other people on the road as well, insurance companies will always raise your prices a large amount.
Accident without fault
An accident without fault is exactly what it sounds like: an accident that you didn’t cause. The unfortunate reality of driving is that sometimes you do everything right, but you still end up in an accident.
Your insurance rates usually won't change if you're not at-fault in an accident. However, 12 states—Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah—have no-fault insurance laws, which means they don’t assign blame for auto accidents.
In these states, your rates will likely raise, even if you’re not responsible for an auto accident.
Hit and runs don't increase your insurance rates
A hit and run accident is the same as an accident without fault, except that no-fault rules don’t apply. Your insurance rates will never increase if you have been the victim of a hit and run.
Accidents can’t always be avoided, but it’s good to know how they impact your insurance rates. Driving safely doesn’t just keep you healthy—it keeps money in your pocket!