Have you ever had a car wreck? If so, then you know the headaches they can cause, especially if the wreck was your fault. Not only will you have to repair or replace the car, but you might also face a few hurdles with your car insurance. While you might be able to claim the damage costs for this wreck, there might be long-term effects on your policy. What are some of these impacts? Are there any ways to avoid them?
Car Wrecks and Insurance Risks
When you have a car wreck, then your car insurance helps you pay for costs like car repairs and medical bills. When the accident is your fault, coverage can also allow others to claim their damage on your policy.
Once you make a car insurance claim, your risk rating might begin to rise. That means that the financial investment your insurer must make in you will increase. As a result, they might have to increase your premiums the next time you renew your policy.
This is particularly true if the accident was your fault. Because you caused the accident, you were responsible for the costs your insurer had to bear. They will likely have no choice to increase your premium to make up that difference. You might even begin to face restrictions on getting coverage in certain situations.
At-Fault Claims and Insurance Eligibility
When a car accident is your fault, your insurer will not be able to trust you quite as much as they did when you had a clean insurance history. The accident might appear on your driving record, and you could even face legal charges. Therefore, your ability to maintain car insurance might prove difficult:
Some insurers will terminate a driver’s policy or refuse to renew it when it expires. This will force the driver to look for a new insurer or buy a high-risk driver policy from their current company.
Certain insurers will deem a driver ineligible for certain types of coverage. For example, they might only offer drivers the coverage required by their state of residence. The driver might not be able to get optional coverage, like comprehensive and collision damage insurance.
Optimally, you should be able to file against the at-fault driver's liability insurance in accidents that weren’t your fault. However, that driver might lack the liability coverage to pay you. Instead, you might have to file against your own uninsured/underinsured motorist coverage. In these situations, your insurer might choose to waive or minimize any rate increases. This is not a universal rule, however, so always talk to your agent about the ramification of these claims.