Car accidents are awful. They cause harm and injury to people involved. They can cause severe damage to vehicles. And as if that is not enough, they have long-term effects too. People can feel the effects of injury for years to come. Finally, they can cause insurance rates to go up. All of these combined create unwanted long-term effects from one incident. Those lucky enough to get out unscathed soon worry about financial repercussions. Many also worry about how long an accident will stay on their records.
On average, insurance companies keep claims records for six years. There are some that also keep it as long as ten. Merely switching insurance companies will not erase your claims records either. As such, if you are involved in an accident, it will most likely stay with you for a while.
How Does An At Fault Accident Affect Insurance Rates?
It is a common belief that your premium will rise after an accident. While that is true for the most part, it is not always black and white. In Ontario, authorities assess who is at fault by using a scale. You can be anywhere from 0% at fault to 100% at fault. Generally, you will only see changes in your premium if you are more than 25% at fault. What does this mean? Even if you were partly at fault, you would not necessarily get an increase in your premium.
So what happens if you are more than 25% at fault? This will show your insurance company that you are a higher risk. As such, they will recompute your premium using this new data. However, this does not mean that your premium will increase immediately. You will only see this change upon renewal. Insurers will then keep this on record for the next six years. Afterward, you may have the option to lower your rates again provided you keep your accident history and driving record clean.
Will My Insurance Increase After Not At Fault Accident?
Contrary to popular belief, simply getting in an accident will not automatically increase your premium. First, you have to be more than 25% at fault to see this change. Just make sure you get as much proof as you can during the accident showing you were not at fault. If possible, it is also best to avoid engaging with the other party. Exchange insurance information and keep it at that. If they get you to admit or even to consider that you were at fault, this could be bad for you. Once you have proven your case, however, you should be in the clear. Your premiums will not increase if you were not at fault during an accident. As it will not go on your insurance record either, there is nothing more to worry about.
What Is Accident Forgiveness Coverage?
Let us say you have been a safe driver all your life. It seems unfair that one accident, which you surely did not intend, would affect your insurance for the next few years. This is where accident forgiveness coverage comes in. Accident forgiveness is a clause in your policy that would essentially let the insurers brush off your accident. Yes, the accident will still go on your record. However, this means your premiums will not increase even if you were at fault.
Each company has its own rules about accident forgiveness coverage. In general, though, some things are standard. For instance, you must have no history of accidents in order to qualify. You must also stay accident-free for a specific duration before the feature becomes active. You must also be driving a personal vehicle and not a vehicle used for business. Finally, it only applies to your first at-fault accident. Subsequent accidents may affect your premium.
Accident forgiveness coverage may already be a part of your policy. However, some insurers offer them as add-ons. This means you have to purchase them in addition to regular coverage.
What Is Ontario’s New Rule About Accidents And Insurance Premiums?
In the end, though, at-fault drivers need not worry too much. If you are from Ontario, then you now have more leeway. According to the Financial Services Commission, insurance companies cannot increase premiums of at-fault drivers if they meet certain conditions. First, insurance companies made no payments for the accident. Second, there must be no injuries. And finally, damages to each car must not exceed $2000. The at-fault driver must also take financial responsibility for all the repairs.
Of course, this means that the at-fault driver may have hefty expenses. However, these are only one-time expenses. The alternative is to have premiums increase over the next few years.
Conclusion
On average, car insurance companies will keep claims records for six years. Some companies, however, keep it for up to ten years. While you can change insurers during this time, this does not erase your records. As such, it may still affect your insurance rates whichever company you go with.
Just because you get in an accident, however, does not mean your premiums will increase. First, you must be found at least 25% at fault. Anything less than that and your insurance rates should not change. Anything beyond that, though, and you can be certain it will make a difference. You will most likely see the increase when you renew your insurance, as your insurers cannot just change your rates mid-term. If you were less than 25% at fault or found not to be at fault at all, then your premiums should not increase. Contrary to popular belief, insurance rates do not rise just because you were involved in an accident.
As an extra precaution, you can opt for accident forgiveness coverage. This feature is sometimes an automatic part of policies. For some companies, though, you have to buy it as an add-on. With accident forgiveness, your first at-fault accident will be “forgiven” by the insurer. As such, you can be sure that you will not get a raise in your premium however big the damage. To qualify, you must meet the conditions set by the company.
About the Author: Ashley Miller
