Automobile insurance companies have certain risk levels and premium charges go with those levels. Depending on your driving history your risk level goes up or down. The more likely to cause accidents the higher risk you are for auto insurers. What better way of proving you are pretty low risk than showing them a clean driving history? It is to say that you are capable of running your vehicle without getting involved in accidents.
What Benefits Drivers Get for Making No Claims?
Motorists start getting discounts for every year they manage to have no incidents or traffic tickets. They can get as much as thirty percent savings after three years of no claims. It is therefore important to keep a clean sheet and keep saving money on premiums. Good driver discounts are the highest discounts most companies offer for a single reason.
After four or five years you can buy accident forgiveness from your current insurer. They sell this coverage usually to their loyal customers with long enough clean driving history. Then, you can keep your rates even though you may be unlucky to have one accident. The insurers take a note of it but already promised not to increase your premium because of it.
How Much Premium Increases You May Suffer After Accidents?
This usually depends on your current savings and seriousness of accidents. If you are found at fault and you caused some damage you expect to see some rises on automobile insurance charges. What this is in fact losing your no claim discounts and getting a little surcharge. So, if you had a few years of no claims bonus you would see considerable rate increases after an at fault accident.
When you apply for your first policy companies have no idea as to how good and sensible driver you are. At that point they will not offer you any discounts for your driving records. But having an accident proves a point in the negative direction. Now you have proven that you can cause accidents and you are higher risk. This may mean you now face surcharges.
A claim would normally be considered important in your records for about three years. Most companies are happy to overlook your driving history more than three years. Therefore, if you just had an accident you will need to wait for three years until your record is considered clean again. However, you would still be seeing discounts on your premiums for every year that you remained accident free following your accident.
Depending on other factors the premium increases could be serious or minor. For example, teen auto insurance premiums would considerably go up following accidents. On the hand, mature drivers with years of experience and otherwise good driving history may not see much change on their rates. Being hundred percent at fault and getting traffic violation tickets and license point deductions will increase the rates more.
Can Car Insurance Companies Cancel Policies Following Accidents?
This is unlikely to happen and they are not allowed to cancel policies midway into the term because of an accident. Policyholders do have accidents and that is why they buy policies to protect themselves. Nonetheless, they are unlikely to have mercy on drunk drivers causing the accidents and they can cancel the policy on that basis.