An Unfortunate Collision: How Much Will My Insurance Rise If I Get Into An Accident?

Wanna know something scary about driving in the US? Buckle up, it’s alarming.

There are nearly 800 car accidents per hour in the States. That’s close to 6 and a half million per year. This is an estimate based on reports; unreported accidents could double that number.

Fair to say, accidents happen a lot. They happen to everyone, including you.

There are two things people do immediately after accidents. Check if everyone’s all right and then worry about insurance premiums.

Here’s how much your monthly insurance bill will rise following an accident.

What Are Premiums?

It’s good to start here, at the basics. What are insurance premiums?

They’re the price tag you have to pay depending on different risk factors.

Statistics are the basis of these factors of riskiness. If you’ve never filed an insurance claim, companies base your premium on generalities. These generalities are statistical.

Your risk premium is the industry’s way of “averaging” you out. Risky archetypes pay a higher price. People who are statistically unlikely to have an accident pay less.

These factors can depend on location, age, gender, and other dependent variables.

Premiums Rise Variably in Different States

Your location is a tremendous factor. An insurance claim will have a different effect from state to state.

Different parts of the country attract different types of people.

Some people have lawyers on speed-dial. States with higher rates of litigation will have higher premiums.

States with a lot of fraudulent activity and hit-and-runs will also have higher insurance rates. Watch out for Floridians, drivers in New Mexico, and Louisiana bandits. They all have the highest rates of accident fleeing.

Depending on the state, rates can arbitrarily rise after collisions. California and Texas will raise rates by over 60-90% for bodily injury claims.

Types of Claims

Insurance claims have types.

There are bodily injury claims and there are comprehensive adjustments.

Accidents that involve injury, or worse, have devastating effects on premiums. Medical bills are costly. Court claims and settlements can be equally or more expensive to insurance companies.

To recoup losses, insurance companies will hike prices. This price hike will remain for the foreseeable future, too. This’ll compound your losses.

Comprehensive accidents are much more forgiving. These include parking lot fender-benders and trees falling on your car. When nobody’s hurt, your wallet won’t be as injured.

Some providers are more forgiving than others. There are programs that forgive your first accident. Be wary, though, accident-forgiveness usually has one-time surcharge.

Cars That Cause Insurance to Rise After An Accident

As you’ve noticed, price hikes are extremely variable. They rise depending on different stats and factors.

The one constant thing you can control is the type of car you drive.

Driving a safe, reliable car that isn’t leased won’t break your bank. A car accident in a frumpy sedan won’t increase your premium too much. But if you’re rolling around in a leased Lambo, try not to get the paint scuffed.

A side note: you don’t control what other people drive. Be extra careful around luxury vehicles and sports cars.

Claim It

Premiums can be arbitrary and based on things independent of your control. You’re sometimes at the whim of insurance companies’ mercy after an accident.

Location of an accident will cause insurance to rise. Different claims have different rate changes; bodily injury is a nightmare. Hikes depend on your car model, too.

If you’ve been in an accident and need further help, honk at us.

Knowing Your Worth: How Much Is Your Car Worth After Getting Into a Car Accident?

Shattered glasses, blinding smoke, blaring honks.

Before you even step outside of your car, you take a quick peep through the dash mirror, only to see the car that hit you from the back is engulfed in smoke.

You can’t tell whether the lightheadedness you feel is due to the collision or the how-could-this-happen thoughts racing in your mind.

But, one thing is for sure – the car accident will depreciate your car’s worth.

Therefore, it’ll impossible to resale or refinance your car at a reasonable price even if it’s repaired and shows no sign of damage.

As such it’s important to understand how to calculate the diminishing value in order to get the exact price your car is worth after the accident.

Read on to find out.

1. Understand the State’s Law

Some states may allow you to file a diminishing value claim against your own insurer, while others against the other driver’s insurer. In some cases, some laws don’t recognize either of these claims.

So, if you’re planning to seek compensation from an insurer, it’s best to first do research on the laws of your state regarding diminishing value claims.

2. Determine Your Car’s Pre-Accident Value

When calculating the diminishing value of your car you need to first factor in the car’s value before the accident. This gives you the starting point from which you can trace your way to the exact price of your damaged car.

You can simply do this by inputting your car’s detail in NADA online calculator to get an estimate of your car. This service is free to use.

3. Apply a 10 Percent Cap

The 10 percent cap, also known as the base loss of value, is the largest amount that can be lost as diminishing value.

Your car’s pre-accident value is multiplied with the base loss value (10 percent) to obtain the cost of the loss through the accident and repair.

Keep in mind that while some insurers may choose to include the 10 percent in their calculation, others may completely ignore it.

4. Use the Damage Multiplier

Usually, the insurance or car-dealership assessing your car after the accident will rate the damage from 0 to 1, depending on the severity of the damage.

0 represents almost negligible damage, while 1 represents extreme structural damage.

This number is then multiplied by the base loss of value to estimate your car’s value.

5. Apply the Mileage Multiplier

The damage adjusted value is further multiplied by the car’s mileage value. The values depend on the total mileage covered by your car.

They’re as follows:

1.0 : 0-19,999 miles
0.8 : 20,000-39,999 miles
0.6 : 40,000-59,999 miles
0.4 : 60,000-79,999 miles
0.2 : 80,000-99,999 miles
0.0 : 100,000+ miles
This system will ensure that a new car (which most probably has less mileage) holds more value than an older car.

Know Your Car’s Worth After a Car Accident!

Understanding the diminishing value of your car is the first step towards fair compensation by the insurer.

For more good estimates, be sure to check in with a car dealer or local mechanic after the accident. What’s more, if your car has had top-notch auto body repair, its worth may significantly increase.

If you need high-quality auto body repair after a car accident, don’t hesitate to contact us at Limerick Auto Body.