How Does a Car Crash Affect Your Auto Insurance Rates? Columbia SC

If you are in a traffic accident, and you are found guilty of the cause of the accident, your auto insurance company will automatically place you in the high risk category. Once you are in the high risk category, it is perfectly legal for auto insurance companies in most states to raise your rates.

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611 Lady St Unit 100
Columbia, SC
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(888) 355-7971
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(888) 355-7971
611 Lady St Unit A
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How Does a Car Crash Affect Your Auto Insurance Rates?

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More than 6.8 million crashes occur each year in the United States. Auto insurance companies end up paying hundreds of millions of dollars each year in claims as a result of reckless driving. Unfortunately, it does not take much to be labeled a reckless driver. Any kind of distracted driving, whether you are distracted by unruly kids in the car, you are talking on your cell phone, eating a sandwich or fidgeting with your iPod, will automatically place you in the reckless driver category if you are in a collision.

Speeding, honking your horn, weaving in and out of traffic, tailgating, flashing your lights, passing on the right shoulder, and making obscene gestures all fall under aggressive or reckless driving. If you are in a traffic accident, and you are found guilty, and any of the behaviors listed above are associated with the cause of the accident, your auto insurance company will automatically place you in the high risk category. Once you are in the high risk category, it is perfectly legal for auto insurance companies in most states to raise your rates by as much as 75 percent – even if it’s your first offense.

In the most lenient states, auto insurance companies have the right to cancel all discounts for a first offense. If reckless behavior such as driving while under the influence is involved in any auto accident, car insurance companies have the right to reject your application for vehicle insurance. It is important to keep in mind that speeding, driving while under the influence, and reckless driving convictions will have the greatest impact on your auto rates.

While some companies may increase your rates by as much as 75 percent depending on the circumstances involved in your first accident, the average rate increase for a first accident is 10-30 percent. For a second accident, the percentage increases are staggering. Auto insurance companies may increase our rates by anywhere from 45 percent up to 150 percent. There are several exceptions to the increase rules and fortunately, the increases don’ last forever. Unfortunately, it will take some work on your part to prove to the auto insurance company that you are a safe driver. Let’s start with the exceptions.

Some auto insurance companies reward drivers that remain accident-free for at least nine years. These drivers must also be long-time customers of the insurance company. If this sounds like you, and you find yourself in an at-fault accident, you will be “forgiven” and you won’t see an increase in your premium. Next, if you are a member of the United Services Automobile Association (USAA) and you remain accident free for five years, you will receive a waiver good for one at-fault accident (per policy). USAA members may also purchase an endorsement, good for one at-fault accident.

If you are not lucky enough to keep an accident free record for nine years, or you are not a USAA member or you do not own a policy that offers accident forgiveness, don’t worry. Your premium increase won’t last forever, as long as you keep a squeaky clean driving record for at least three years after your first accident claim. Once your “probation” period is up, your rates will drop back down to the pre-accident rate.

For information about auto insurance and auto insurance laws in your state, visit your state insurance department. Click here for a directory of state insurance department websites or visit the National Association of Insurance Commissioners (NAIC) at www.naic.org.

For more information about auto insurance and auto insurance laws in your state, visit Auto Insurance Tips or your state insurance department for details.