Being in a car accident can be nerve wracking even when no one is injured. Being in a car accident and being the one who is at-fault for the accident can be even more nerve wracking. Not only are you responsible for the damage to your car and someone else’s car, you probably are worrying about what the accident will do to your auto insurance premiums.

The Tide Turning on Rate Hikes

For a long time, auto insurers used accidents as an excuse to raise their clients’ auto rates. Sometimes they would even raise rates when their client was not at-fault, and they didn’t have to pay out any money for a claim. But public outcry along with changing laws has changed this in many states. Many responsible drivers, however, may still be in for a rate increase.

General Procedures for Handling At-Fault Claims

The laws on why and when an auto insurance company can raise rates based on an at-fault accident vary from state to state. Here is some general information about how insurance companies handle at-fault claims and a few tips.

• If a police report was made and the officer in charge designated one of the parties in the accident to be “at-fault,” insurance companies do not have to take the officer’s word for it. Most insurance companies will hold their own investigation into the accident to determine who they believe was at-fault for the accident. Often there are state laws that determine how the investigation must be conducted.

• Some companies take the severity of the accident into consideration when deciding whether to raise rates or not. That means that a minor fender bender may not affect your rates, but an accident in which major auto repairs need to be made or medical bills need to be paid probably will.

• Some insurance companies have begun to offer what is called “Accident Forgiveness.” If a driver has a good driving record according to their insurer’s standards, the company may not raise the driver’s rates for his first at-fault accident.

• Most people can expect a significant rate increase for their second at-fault accident, especially if it follows closely behind their first one.

• An insurance company will often drop a driver who has several at-fault accidents within the span of a few years.

• The number of years a company can increase your rates for an at-fault accident varies from state to state. You can find out asking your insurance company how long your state allows. When the time limit is up, check your policy to make sure you are no longer being penalized for the accident.

• If you are in the market for new auto insurance, ask your agent what the company’s policy is for raising rates after an at-fault accident. It may make sense to pay a slightly higher premium if the company has an “Accident Forgiveness” program that you qualify for or if they have reasonable at-fault policies.