I was at fault in an auto accident…what can I expect from my auto insurance company?

Auto accidents can truly be some of the most disruptive and chaotic events that occur in our lifetimes. From the craziness that can ensue at the scene of the accident to the aftermath of dealing with the parties involved, getting cars fixed, and sometimes dealing with medical situations if injury occurred, it is perhaps one of the biggest understatements in the world to say that auto accidents are no fun.

One of the least fun things about dealing with an auto accident can be the time you spend dealing with the insurance companies involved. It seems that you have conversation after conversation where you end up saying the same thing and giving statements and facts about the incidents that occurred so that the insurance companies can best determine who is at fault and whose policy should pay for the damages. Your problems simply become compounded if it is determined that you are the one that is at fault. Now the fear sets in of just exactly what is going to happen concerning your insurance policy. Will your rates go up? Will you be canceled? These questions and more can drive many of us crazy with uncertainty as we deal with being at fault in an auto accident. While none of the answers are steadfast and occur specifically in every situation, let’s look at some of the things that can potentially occur concerning your insurance company following an at fault accident.

First of all, if there is any kind of affectation, it will not happen immediately. Many times, insurance claims can take many months or even years to be settled. In almost every case, no specific determination will occur on the insurance policy until the case has been completely closed. This does mean that if the accident occurred on one day and the case was not closed until two years later, any rate increase or decision of cancellation would probably not happen until the next renewal date following the closing of the insurance claim.

Secondly, depending on what is offered by your particular insurance company and how long you have been insured with them, you may be eligible for some type of accident forgiveness program. The way these generally work is, if you have been insured with the company for a specific period of time, they may waive any negative affectation to your policy for the first accident that you have. This would mean no rate increases or cancellations of any kind. These types of programs often have stipulations on them so it is best to sit down with your insurance agent and find out the wording of your particular policy to know how these may or may not apply. In addition, things such as reckless driving or driving while intoxicated may not fall under this category and because of the nature of the incident, you still may be penalized from the insurance company.

Once all determinations of fault have been made and the claim has been closed, the company may impose a rate increase or cancellation on the policy of the driver of the automobile in the accident that occurred. One of the things that determine the actual rate increase is the total amount of money that was paid out as part of the claim. This could include liability paid out to the other party, damage to your vehicle, and any other expenses accrued. The general rule of thumb is that these rate increases will take effect at the next renewal date following the closing of the claim. This is not steadfast, however, and your company’s policy may differ so again it is important to sit down with your agent to go over the exact wording of your particular policy. Generally, insurance companies don’t cancel a policy after one incident but instead simply raise the rates of the premium for a set period of time. If multiple at fault incidents occur within a set period of time, then the company may decide to take action and non-renew the policy.

There are a few ways to potentially mitigate the rate increases that a company may impose based on an at fault accident. One of these is to raise the deductibles of coverages such as comprehensive and collision. Once you have one accident, you certainly don’t want to have another and if you do, the more you can pay out of pocket than the more you will save on your insurance premiums. This makes raising deductibles such as collision to their highest limits a potentially wise idea. Another way to help mitigate these rate increases is to perform what is called a driver exclusion. The insurance company may offer to exclude the person who was at fault in the accident in order to keep policy on the books. If you were the only person in the household and this would preclude you from driving your automobile, this wouldn’t be a wise idea but if the person driving was a friend or another family member that could get insurance elsewhere, this may offer a solution to you and may even stop the rate increase from happening at all.

Please keep the above in mind if you ever do have an at fault accident and in the meantime, make sure to visit with your insurance company and agent face-to-face to go over the specific definitions of your policy so that you understand exactly what could occur if you are found liable for an auto accident in the future.

This entry was posted on Wednesday, August 12th, 2009 at 7:05 pm and is filed under article. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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