How Much do Insurance Bills go up by after an Accident?

After a car accident, you might be wondering how much your auto insurance premiums will go up by. Unfortunately, there’s no simple answer. Numerous factors determine your car insurance premiums both before and after an accident, and those factors vary not only by driver but also by insurance company.

Whether you barely tap another car, cause a five car pile-up, hit a pedestrian, collide with a deer, or smash into an electrical pole, broadly speaking, how much your premiums will increase by depends on the severity of your accident and how much it costs your insurance company.

An at-fault accident where you not only damage another car but also injure the driver will increase your premiums more than if the same accident didn’t result in bodily injury. Likewise, an accident where your car and the other driver’s car are both totaled will increase your premiums more than one where all that needs fixing is the other driver’s rear bumper.

This all assumes you’re at fault. If you’re in an accident but you are less than 25% at fault, your premiums won’t go up. And if you purchased a policy with accident forgiveness (technically called S.E.F. No. 39 – Accident Rating Waiver Endorsement) your premiums won’t increase after your first at-fault accident.

Also affecting your premiums after an accident is a factor you have no control over and probably know nothing about: your insurance company’s overall loss history with all the drivers it insures. If your insurer has to pay out lots of claims, it’s going to have to impose steeper increases on drivers who have accidents just to stay in business. In 2013, the cost of the average collision claim was $5,700, according to Alberta’s Automobile Insurance Rate Board. Accidents aren’t cheap for insurers.

At-fault accidents stay on your driving record for six years, so if this isn’t your first accident in that time, expect a bigger premium increase than if it’s your first. If there’s criminal element to your accident — say, you’re convicted of drunk driving — you’ll be hit with a 300% surcharge for a first offense. With the average premium in 2013 costing $1,113, a 300% surcharge would cost you $3,339. In general, drivers with the worst records pay basic insurance premiums of $4,000 to $7,000.

If you find yourself with higher premiums because of an accident, let me help you shop around for a new policy. There are about 60 auto insurance companies in Alberta, and their premiums differ significantly — I’m talking more than $1,000 between the most and least expensive insurers.

Considering that you’re looking at higher rates for six years until the accident falls off your record, it’s definitely worth it to see what rates different insurance companies will offer you.

Contact me for more details on auto insurance or request a quote online.

Sources

http://www.airb.alberta.ca/drivers/faq.aspx

http://www.airb.alberta.ca/annual-reports/2014.pdf

http://www.airb.alberta.ca/gridrate/Def_ConvictionSurchargeTable.aspx

http://www.airb.alberta.ca/drivers/getting_insurance.aspx

http://www.airb.alberta.ca/gridrate/airbgridinfo.aspx

http://www.airb.alberta.ca/public_meetings/2014/AIRB-Annual-Review-2014-Report-Appendix-B-Consumer-Rep.pdf

http://www.airb.alberta.ca/drivers/factors.aspx

https://ama.ab.ca/knowledge-base/articles/what-is-accident-forgiveness-insurance/