September 8, 2010

How Even Small Accidents Can Increase Your Auto Insurance Premium

A sure-fire way to keep your auto insurance premium from going up is to never have an accident. In today's hurry-up lifestyle, that isn't always easy to do. And if an accident does occur, be prepared to spend an inordinate amount of time dealing with insurance agents who try to resolve the issue to their company's advantage. Even small accidents are enough to change your insurer's attitude towards you, his client.

There is no law that demands you report a fender bender, whether it involves your single car or another driver who is willing to also ignore filing insurance claims. In many cases, its smart not to report a small accident, the total repair cost could be less than your deductible. But if you do report minor damage, especially more than once, look for your auto insurance premium to go up. It's wise to thoroughly review your car insurance policy to determine how your insurer plans to deal with any possible accidents.

Insurance companies have a rating point system for adjusting auto insurance premiums in the event of an accident. A first-time reported accident could boost premiums by as much as 15 percent. A second accident claim likely will hike premiums upwards of 30 percent, or more. That premium setting formula differs from company to company, it isn't set in stone. The worst outcome resulting from an ongoing pattern of accidents might find your insurer dropping you as a client. This will make it difficult to convince another insurance company that you deserve first-class treatment.

What is about small accidents that make insurance companies more than a little edgy? Repeated small accidents often are accompanied by traffic citations, and other high-risk behaviors. Moving violations that occur more than once or twice, bring to bear the argument that a motorist isn't paying attention while driving; or simply ignores traffic patterns and signals. Any of those driving fault are potentially hazardous, and can be considered bad enough by insurance companies to plaster an "at risk" label on a current or potential client. That severely limits any driver's ability to obtain a favorably priced auto insurance premium.

Insurance premiums can be affected by several situations. If you file a claim or buy a more expensive car before policy renewal time, then expect increased premiums. The inverse is also true; good drivers may be eligible for accident forgiveness–a practice that some insurance companies employ for use with their preferred customers. To be able to take advantage of this feature you must maintain a clean driving history for quite some time.