Will My Car Insurance Go Up After An Accident?

The days immediately following an accident can be overwhelming. You’ll need to seek medical attention for injuries, file insurance claims and arrange for repairs and alternative transportation. Then, when things start to calm down, you get an insurance renewal with a surprise significant premium increase.

Unfortunately, there’s a good chance your car insurance rates will go up after an at-fault auto accident. Michigan does not regulate how much insurance companies charge, so it is up to each insurance provider to set appropriate rates. An at-fault accident on your record will almost always lead to higher premiums.

Why Insurance Rates Increase After an Accident

It is often easiest to think of your premium as a direct reflection of how much of a risk the insurance company is taking by offering you coverage. A higher risk demands a high premium, whereas a low-risk driver will pay lower rates.

When insurance companies write a policy, they perform risk calculations to determine your rate. Drivers who they feel are high-risk pay higher premiums. After an accident, you become a more significant risk, thanks to the payout.

If you were at fault for causing the accident, your premium is impacted more than if the other driver was at fault. However, even a no-fault accident can raise your rates. This is more common in no-fault states, including Michigan, since claims go to your insurance company regardless of fault.

Some insurance companies have programs in place for high-risk drivers. Called accident forgiveness, these programs can help you keep lower premiums even after an accident. Some also allow you to lower your rate through specific actions, such as taking a defensive driver course.

How Insurance Rates Are Calculated

The following are key factors that influence insurance company premium calculations. Understanding these may help reduce the risk you pose — and your premium.

Garaged Location

Where you keep your car plays a major role in your premiums. Location affects the likelihood of your vehicle being stolen, vandalized, or in a crash. Your insurance company often refers to this as the garage location, regardless of whether or not your parking space is covered.

Michigan has historically had very high insurance rates. Unfortunately, it also has one of the country’s highest rates of uninsured drivers. New laws are designed to make insurance more affordable and accessible.

Car Use

The manner and frequency you drive your vehicle is another key determining factor of insurance premiums. This includes the following:

• If your vehicle is for work, commuting, pleasure, etc.
• The number of miles you drive annually
• The length and frequency of your commute

Driving Record

A clean driving record is the best way to help keep your insurance rates low. An accident will increase the risk an insurance company takes when providing you coverage. The rate will typically remain elevated for three to four years after the accident before returning to pre-accident levels.

The same can be said of risky behaviors, such as speeding, running red lights or driving under the influence of alcohol or drugs. These moving violations may carry points that are placed on your driving record. Points stay on your license for two years. Convictions for a moving offense remain on your record for a minimum of seven years.

Other Factors

• Car make and model —Your car can impact your premium. If it is statistically likely to be stolen, vandalized or in an accident, you will pay more to insure it. The cost of repairs and the likelihood it will cause property damage in a crash are also factors. 
• Gender —Statistics show that women tend to be safer drivers than men. Their premiums are often lower to reflect this. 
• Age — Younger drivers are generally considered high risk due to their inexperience and high accident rates

Michigan’s No-Fault Insurance Laws

If you are at fault in an auto accident, your insurance rates are almost guaranteed to increase. However, what happens in states like Michigan with no-fault laws?

In Michigan, an insurance company can charge rates they determine accurately represent the risk to insure you. Since your PIP coverage pays for medical expenses regardless of an accident’s cause, several accidents where the other driver is at fault can result in considerable losses. As a result, the company may evaluate your policy, determine you are a larger risk than anticipated and increase your rates.

How To Find Lower Insurance Rates After an Accident

Since you know a premium increase is coming, now is the time to take proactive steps toward keeping them manageable. The following strategies may help you find lower rates on a new policy.

Shop Around

Insurance companies rely on specialized formulas to calculate rates. While they are mainly similar, even a slight difference from one company to the next could equal hundreds of dollars on an annual premium. Therefore, it is in your best interest to shop around for the best rates.

Compare similar policies with equal coverage amounts to get an accurate picture of potential savings. What seems like a great rate may be inferior coverage. It’s also a good idea to ask insurance companies about discounts available to you, such as multi-car discounts or a special rate for alumni associations.

Change Your Coverage

Michigan’s new auto insurance law gives you more choices on no-fault coverage. Examine available options to see if a lower coverage amount meets your needs. You may be more comfortable adjusting your deductible. Be sure you can absorb the potential financial impact of any changes you make to coverage.

Maintain a Clean Driving Record

You can’t erase the past strikes on your driving record, but you can take steps to ensure new ones don’t end up there. This generally entails following traffic laws and avoiding moving violations. Additionally, taking an approved defensive driver course may lower your premium after some infractions.

Fight an At-Fault Determination

Sometimes, an accident is attributed to a driver who was not at fault. For example, if someone cuts you off and you hit them, they retain at least some of the responsibility for the accident. However, you will likely be labeled the at-fault driver because you hit the other car.

Because you will file claims with your personal insurance company, you may not think much about who is at fault for an accident. However, since this is one of the most significant factors in your premium increase, fighting a false at-fault determination is logical.

Fighting a false determination can be challenging. First, you must obtain copies of any accident reports and insurance company investigation documents. Speaking to witnesses can be especially helpful, particularly if they recorded the accident. You may also be able to find security or doorbell camera footage of the accident from nearby buildings.

The work involved is often more than most drivers can take on. However, hiring an attorney makes the process simpler. An accident lawyer has the knowledge and tools to conduct accident investigations on your behalf and establish the other driver’s liability.

Let Our Attorneys Fight for You

The Mike Morse Law Firm attorneys understand that increased insurance premiums can be a financial burden. Therefore, we offer free case reviews and never charge upfront fees. Contact us at 855-MIKE-WINS to schedule your free, no-obligation case evaluation.