How to lower insurance costs after an accident
If a driver is in an accident and was at fault, their car insurance premium is likely to increase. But even after an accident, drivers still have a few options to get cheaper car insurance.
1. Rate shop
There's no reason not to shop around with other insurers after a premium increase. In fact, it's smart for drivers to shop around once a year anyway, just to make sure they have the most complete coverage for the price. Depending on the severity of the accident, the policyholder may find themselves shopping for high-risk car insurance. No insurer is going to ignore an at-fault accident, but some charge less for premiums than others.
2. Increase your deductible
If a motorist currently has a low deductible, they should be able to lower the price of their policy by increasing the deductible. Before doing so, drivers should review their budget to make sure they have enough in emergency savings to cover the deductible if another accident occurs.
3. Search for missed discounts
It's possible to miss a discount when signing up for auto insurance. Or someone's situation could change in a way that makes them eligible for a discount. Here are some of the most common auto insurance discounts offered:
- College student, away from home
- Good student
- Low mileage
- Senior
- Military
- Professional
- Policy bundling
4. Raise the driver's credit score
Many insurance companies factor in credit score when determining policy rate. If the driver's credit score was low when they first signed up for car insurance, they should take steps to raise it. If a driver is successful in improving their credit score, they can ask the insurance company for a rate review based on the new (higher) score -- and possibly qualify for a lower car insurance rate.
5. Take a driver's education course
Taking a defensive driving course or accident prevention course can cut a driver's premium costs. The amount varies by insurer, but it's a discount worth investigating.
How to avoid higher rates in case of a car accident
Getting in a car accident can be stressful and expensive, even aside from worrying about what will happen to the driver's auto insurance costs. Drivers who are concerned about being hit with an insurance increase following an accident should try to change their policy -- before an accident happens.
Here are a few ways to get a better car insurance policy to protect you from possible rate hikes after a car crash.
Get accident forgiveness coverage
Drivers can often try to add accident forgiveness coverage to their policy. Not every car insurance company offers this. But some insurers automatically apply accident forgiveness after a driver has been accident-free for a specific number of years. Others allow a driver to add accident forgiveness to their standard policy for a small premium increase.
Ask the auto insurance company for coverage options
Along with asking for accident forgiveness coverage, drivers can look for ways to customize the car insurance policy. Different insurance companies have different rules for how they treat accidents; some are more forgiving than others, while some charge higher rates or might even cancel coverage for drivers with too many accidents on their records.
Here are some questions that drivers should ask their auto insurance company:
- How long do accidents stay on insurance?
- How much can I save by bundling auto with home and life insurance coverage?
- Can I lower my rates by raising my credit score?
- Do speeding tickets affect insurance? If so, by how much?
- How often will you recalculate my rate?
- Can I save money by signing up for a telematics insurance (usage-based insurance) plan that rewards safe driving?
Even for drivers that have had a crash recently, or that have endured years of rate hikes, there still might be better options out there for car insurance. Don't assume that every auto insurance company is the same. Different companies price risk differently, and some might offer a better deal -- even to drivers with less-than-perfect driving records. Drivers who shop around for car insurance price quotes might be pleasantly surprised by their choices.