Insurance Rates After First Accident

You must have seen some insurance companies advertising about not raising the car insurance rate after the first accident. What does this mean?

Insurance companies would normally raise the insurance premiums as soon as you are found to be at fault in an accident. You should not be surprised if the car insurance premiums go up by 30 to 40 percent after an accident. The increase in the car insurance premium stays high for 3 to 5 years before they start coming down again and only if you have maintained a very clean driving record after your last accident.

The accident forgiveness is designed to attract customers whose existing insurance companies do not have that benefit. But since the insurance companies still pay for the damages from the first accident, there would a lot of fine print that goes unread and you might learn about that the hard way.

You need to find out the details from the insurance company you have the car insurance from as these details can vary from plan to plan and company to company.

What does the first accident forgiveness mean to you? The insurance company should make it clear that they count only the accidents that you are at fault with. If someone smashed your car while parked in a parking lot, that is not supposed to raise your insurance premiums but would that get counted as the first accident and you are left with no more chances to be forgiven.

It is worth noting that the first accident forgiveness is just a marketing tactic. Yes, you might be able to keep your insurance premiums low but if you get into a second accident which might even be a minor one, the hike in your premium might be more than what it would have been without the first accident forgiving insurance plan. A second accident also proves that you are more risky which anyway would be used to raise the car insurance premiums higher than what you would expect.