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Car Insurance Price Hikes – The Consequence of Accidents and Speeding

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When you get a speeding ticket or you’re involved in an accident, you probably don’t think about how it will affect your insurance. The stress of the situation is more than enough to overwhelm your thoughts, and figuring out the next step to take is your initial reaction. However, several weeks or months may go by before you finally get a new insurance bill, and it stops you dead in your tracks. Your premium went up, and while it seems like an arbitrary increase, insurance companies have methods to determine your risk.

What If I Have an Almost Clean Driving Record?

car insurance price hikes

Image via Flickr by Chris Yarzab

When you shop around for car insurance, one of the first things an insurance company wants to know is how many speeding tickets and moving violations you have. This helps determine your risk, and the more violations you have, the more likely you are to get in a more severe accident, at least in the eyes of the insurance company.

That said, you may have a get-out-of-jail-free card. If you receive your first speeding ticket or you’ve been clean for five years before getting one, it may not affect your rate in the slightest. If you think it might, you may want to consider fighting the ticket to avoid more costly premiums.

Are Accidents Worse Than Speeding Tickets?

In short, there’s no definitive way to tell if an accident will increase your premium more than a speeding ticket. Once again, it’s up to the insurance company to determine, and the cleaner your driving record is, the more you can avoid added costs to your monthly bill.

How Will This Affect My Insurance Premium?

Insurance companies increase rates based on a few methods. The first and perhaps most popular method is to apply a surcharge to your policy for a certain timeframe. This usually lasts anywhere from one to three years, and if you’re a clean driver otherwise, you might just land on probation. When you’re on probation, you can avoid an increased rate if you don’t have any other incidents for one year. However, if you’re a regular violator, the rate may stick for up to three years.

What If an Accident Wasn’t My Fault?

One of the most common misconceptions about auto insurance is that your rate won’t increase if you didn’t cause the accident. While some states have legislation that forbids this practice, others don’t, leaving it up to the discretion of the insurance company. Other states put caps on not-at-fault rate increases, meaning that you may see a higher bill, but nothing significant. While it seems unfair to raise your premium when you didn’t do anything wrong, don’t be surprised if you find a little something extra on your bill.

The most important thing to know regarding insurance, accidents, and speeding tickets is how they will affect your premium. If you aren’t sure, ask. Surprisingly, insurance companies are more than willing to go over insurance rate hikes with you based on certain situations. Plus, it can help you weed out poor insurance companies from reputable ones that value your business.

Categories: Car Accident