Switching Car Insurance After Accident

Let’s face it; car accidents do happen. You’ll probably be involved in a car accident at least two to three during your lifetime, whether you’re at fault or not. So, what if you had been considering changing insurance companies? Can you switch car insurance after an accident?

Yes, You Can Make the Switch

Even if you’re at fault, being in a car accident does not prevent you from switching insurance companies. You can change companies at any time if you have an open claim with your current insurer. To help you decide if switching insurance companies after claim is the right thing to do because of an at-fault accident. Here’s a quick look at everything you need to know.

Your Old Insurance Company Must Cooperate

Even though they may not be thrilled with your decision to switch, your old company will still be responsible for handling your accident. Not only will they cooperate with you, but you’ll have to do the same, even if a lawsuit ensues. For example, if the other driver’s vehicle has damages beyond your policy limits, they may decide to take the insurer to court.

Once you switch to a new carrier and agree to your new policy, they will become responsible for covering your automobile.

In most cases, you can change to cheap car insurance after accident. However, if you make monthly payments on your insurance premium, you may be responsible for outstanding finance charges. In other cases, your old insurance company may refund a portion of your monthly premiums.

Is This the Best Time to Make the Switch?

If you weren’t at fault, switching to a different insurer isn’t the wrong time. If you can find a lower rate for similar coverage, it may be well worth the effort.

Most experts agree that the only time you do want to change insurance coverage after accident is when your premium is likely to increase significantly. However, it may not be the best time to change providers if you were in an at-fault accident. While it’s true that you probably won’t face any penalties and may be given a reasonable rate, to begin with, you should expect an increase once the accident is put on your driving history.

Here’s an example. If your current insurance company offers accident forgiveness, you may see nothing more than a slight increase in your monthly premium. If your insurer does not provide accident forgiveness, they may increase your premium by as much as 50-80%. In this case, switching to a new carrier may make the most financial sense.

Why This Might Not Be a Good Time to Switch Insurance Companies

While there is nothing wrong with shopping around and looking at your car insurance options, you aren’t likely to find a great deal even after an at-fault accident. Remember that even if a new company initially offers you a shallow rate, it will increase once you’re at-fault record goes on your driving record. After just one at-fault collision, you can almost always anticipate buying cheap car insurance after an accident.

Don’t be Tempted to Hide Your Accident from Your Insurance Company

Even if you’re at-fault accident was just a simple fender bender, you still need to report it to your insurance company. Letting it slide and paying for any damages out of pocket may be tempting, but this can backfire.

For example, the other driver may change his or her mind weeks or even months later and then decide to sue. If you haven’t already reported the accident to your provider, they may refuse to honor the terms of the policy. This means you’ll be responsible for legal fees and any judgments in the plaintiff’s favor. In this case, that slight increase you might have faced in your monthly premium will likely have far fewer financial consequences.

Even if you do get lucky and your insurance company honors your policy. If this happens, you can expect an increased premium. You’ll have missed out on time they could have used to investigate the accident and prepare a defense. Essentially, by not making your insurer aware of the accident when it happened, you’ve helped the plaintiff increase their odds of winning in court.

Ask About Accident Forgiveness

If you do have to report an accident, be sure to ask about accident forgiveness. Some insurers may include this immediately after you start your policy with them. Others may require that you’ve been a customer for anywhere from three to five years. Be aware that some insurance companies may also consider any moving violations you’ve had in the past three years as a reason to deny accident forgiveness.

Consider Taking a Driving Class

Driving classes are for more than just new drivers. Anyone can sign up for a driving class, giving you a quick refresher on basic driving rules and laws. Your insurance company may view this as an indication you are looking to improve your driving skills and decide not to increase your premium by such a high amount after an at-fault accident.

Remember that a driver’s education class may not do anything for you if you are charged with driving under the influence or reckless driving.

Reevaluate Your Deductible

If you know your provider plans to increase your premium, you may want to consider increasing your deductible. This is the amount you’ll pay after a claim is filed before your insurance company will pick up the bill. The higher the amount you increase your deductible, the lower your premium may be. Opting for a $1,000 deductible could potentially save you an astounding 25% or more.

Reconsider Your Policy

Again, if you know your insurer plans to raise your premium, you may want to consider making changes to your existing policy. For example, dropping collision and or comprehensive coverage may drastically reduce your monthly premium. This is especially true if you drive fewer than 10,000 miles per year.

If All Else Fails, Then Shop Around

If your insurance company chooses to significantly increase the amount of your premium, despite your best efforts, it is probably time to start considering your options. Switching car insurance after an accident takes some effort, but you could save hundreds annually.

There are plenty of auto insurance companies out there that want your business. Compare multiple car insurance providers online and save on your next policy. To get started, enter your zip code and start comparing quotes in minutes.