If you are unfortunate enough to be involved in a collision, often your second thought after confirming everyone is OK, is what will this do to my premiums?
After your vehicle has been towed to a specialist auto repair center such as Glendale collision shops or somewhere similar that is approved, you can turn your attention to finding out what is going to happen to your auto insurance premiums once you make a claim.
The news might not be as bad as you think
If this is your first accident and it has been determined that you were at fault for the collision, this will mean that your insurer is going to have to pay out for the damage or compensate the driver of another vehicle if that is relevant to the accident.
If the insurer has to pay out for a claim, the obvious assumption is that they are going to raise your premiums when it comes to renewal time, but this might not always be the case.
You might find that some insurance are bit more forgiving than others and if the incident was relatively minor, with no injuries and minimal repair damage, they might exercise a forgiveness policy if it is your first accident.
Ask your auto insurer if they operate a policy like this and if they do, the premium news might not be as bad as you first feared.
Not at fault
Another point well worth considering is the fact that many states have laws in place that protect drivers from rate increases if you were not at fault for the accident.
Having said this, you should also be aware that even if you are involved in an accident that turns out not to be your fault, the fact that you were involved in an accident in the first place, might be enough to prompt the insurer to raise your premiums on renewal.
The reason they might to do this is because you could be considered a greater risk to insure simply because your record shows you have been in an accident, despite the fact that you were not at fault.
It all depends on the circumstances and the attitude of the insurer, so ask whether they have any specific rules regarding claims where you were shown to be not at fault.
Complicated points system
Trying to understand the internal workings of each insurance company is likely to be a thankless and impossible task, as they all have their own individual methods for working out how much to raise your premium by, when you make a claim and were deemed to be at fault.
Some insurers may decide to add as much as a 40% increase to your next annual premium quote, whereas others may have a mind-boggling points system that could involve classifying you as a high-risk driver, somewhat unfairly in certain circumstances.
If this happens to you, the points loaded will gradually decrease over a period of normally between 2 and 6 years, so you could feasibly end up paying higher premiums for at least a couple of years until you get your good driving record back and your points down.
As all insurers have their own points systems and methods of calculation, it is worth shopping around at renewal time to see if you wonâ€™t get penalised as much by a different auto insurer.
Financial responsibility laws
It is unusual but true that there are actually a handful of U.S states where full auto insurance isnâ€™t mandatory, and therefore you wouldnâ€™t have to worry about your renewal premium going up after an accident.
Even if you happen to be in one of those states, there are financial liability laws to post a bond or cash deposit to cover damages in the event of an accident, so it doesnâ€™t often make a lot of financial sense to skip on the auto insurance, even if your home state is one where auto insurance is not completely mandatory.
Buying car insurance in the states is quite a complicated affair compared to some other countries and you have a range of choices of cover such as liability insurance, no-fault insurance and even uninsured motor insurance, to protect yourself against the cost of an accident with an uninsured driver.
If you have collision insurance, you probably shouldnâ€™t need to take out uninsured motor insurance, but it certainly pays to choose your insurer and check the terms of your auto insurance policy, if you want to avoid a hike in the premium after an accident.
Thomas Rhodes has occupied a senior role in fleet-managment for a number of years. He enjoys being able to share his insights with an online audience. You can find his blogs on a number of different industry websites.