• How Multiple Accidents Affect Your Insurance Policy

    If you have accident forgiveness on your car insurance, two accidents may not affect your premiums very much. In order to determine exactly how one or two accidents will affect you, there are certain things you need to know.

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    No Fault Coverage and Laws

    No fault insurance is a type of coverage where the insured party, the policyholder, is indemnified, or paid, by their insurance company directly for any losses incurred in any loss generating incident, like an accident. This occurs regardless of any determination of fault in the accident. In certain states, this type of insurance also restricts the right of the policyholder to seek any extra monetary compensation for losses caused by the other involved drivers through litigation in civil courts. With this type of coverage, only the driver actually at fault will experience an increase to their premiums.

    DMV Points System

    One of the major factors involved in determining how much you pay in premiums is what’s on your driving record. Your driving record is expressed in points. When you receive a ticket for a minor moving violation, you will receive a certain amount of points. Having an at- fault accident, also places a certain number of points on your record. Point systems vary from state to state, so check with your local Department of Motor Vehicles to see how they rate individual offenses. These points tell your insurance company in a general way what type of driver you are. The more points you have while maintaining your license, the higher your insurance premiums will be.

    Number and Severity of Accidents

    The more accidents you have, the more it’s going to cost you for collision coverage. If you only have one or two severe accidents on your record, with large damage and injury claims, the insurance company is going to take this into consideration. The more they’ve had to pay out in damages and injury claims, the more of a risk they are going to consider you.

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    Accident Forgiveness

    Many insurance companies offer a type of coverage known as “accident forgiveness” as a means of selling more policies. What accident forgiveness means is that if you are determined to be at fault in an accident, your rates will not be affected as much as if you did not have this coverage. Some companies are offering this as an inclusion to their standard policies, while others are offering it as an addition to their standard policies.

    If you have a clean driving record prior to having an accident or two and you have accident forgiveness with your coverage, the premiums you pay for collision coverage may not be affected much, if at all. Also, if you have no fault insurance, having one or two accidents may not affect your premiums very much because of the aversion of costly litigation. Knowing what the provisions of your particular policy are before you have an accident is the best way to make sure your rates are affected as little as possible if you do have an accident.