How to Reduce Car Insurance After Accident

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In a nutshell...
  • A single car accident can cause your insurance premium to skyrocket
  • Adjusting your deductible is a fast and easy way to lower your premium
  • Shopping for lower rates can help you save money on auto insurance

If you have recently filed a claim on your auto insurance policy after an accident, you may have been relieved to use insurance benefits to pay for your related expenses.

However, more recently, you may have received a notice that your premium amount is increasing because of the accident.

While this is a common occurrence, it can be financially difficult to bear for some drivers. If you are looking for a great way to save money on auto insurance after a car accident, rest assured that you have several opportunities to accomplish your goal.

Looking for better and more affordable auto insurance? Enter your ZIP code above and compare at least three to four policies today!

Understand Why Your Car Accidents Affects Insurance Costs

One of the key criteria that insurance companies use to determine your coverage rates is your driving history or record. A car accident as well as traffic violations, such as speeding tickets, can result in higher premiums.

These factors may remain on your driving record for several years, so something that happened two or three years ago can still affect your rates.

However, each insurance company looks at your driving history along with other factors, such as your age and gender, in different ways. With this in mind, you may be able to save money by switching providers.

It can also be helpful to improve your driving history over the next few years by following safer driving habits.

For example, if you also have a speeding ticket on your record from last year, you can avoid getting a speeding ticket for the next few years. When your ticket falls off of your driving record, you may then qualify for better auto insurance rates.

Upgrade to a More Affordable Vehicle to Insure

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Car insurance rates are also based on the repair and replacement cost of the particular make and model you drive.

Theft statistics for the make and model as well as safety gear in the car can affect costs as well. Even the power of the engine can play a role in your premium expense.

With this in mind, you may be able to save a small fortune by replacing your current car with a vehicle that is more affordable to insure.

For example, if you trade in a sports car with a powerful engine for a sedan with a less powerful engine and more safety features, you may save money on your premium.

You can get quotes for several makes and models you are interested in to find the most affordable vehicle to insure before you finalize your buying decision.

Increase Your Deductible

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If you are looking for a fast and easy way to save money on your premium, requesting a higher deductible is an excellent idea. You can change your deductible by just calling your current car insurance provider in most cases.

A higher deductible yields a lower premium, and you may be able to increase your premium up to $1,000 or more.

However, remember that you will need to pay your deductible each time you file a claim. With this in mind, you need your deductible to be reasonable as well as affordable for you to pay.

It is wise to keep your deductible amount in your savings account to draw on as needed.

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Adjust Your Coverage Types and Limits

If you are serious about saving money on car insurance, you can also adjust your coverage types and limits. There are minimum requirements that you must meet, which vary by state.

However, most drivers are required to purchase a minimum amount of liability coverage. Buying the absolute minimum coverage required by law will result in the lowest premium possible.

If you choose to buy only liability coverage, however, be aware of the risks.

This type of coverage will not pay for repairs or a replacement for your own vehicle if it is damaged. Collision or comprehensive car insurance are required for this benefit.

For any coverage that you purchase, remember that the insurance company will only pay out on a claim up to the established limit.

If your claim expenses exceed the amount of your coverage, you will need to pay for these expenses out of your own pocket.

Therefore, while you can adjust your coverage types and limits to save money on auto insurance, this should be done with care. After all, you want to enjoy maximum protection from your policy if you need to file a claim.

Shop for Better Rates

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Shopping for a lower rate on car insurance is another way to save money on car insurance. Each provider looks at accidents differently when determining your rates.

For example, one company may not alter your rate if you have a single accident or traffic violation, and others may not have any leniency in this area. They may also view other factors differently when calculating rates as well.

A smart idea is to request three or four different quotes for car insurance from reputable providers.

Look at the providers’ ratings on the A.M. Best website to confirm that they are financially solid before requesting quotes. Ensure that you request quotes for the same level of coverage to more easily find a reputable provider with the best rates available.

You may consider shopping for new rates approximately every six months to ensure that you never pay more than necessary for your coverage.

Look for Discounts

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There are numerous car insurance discounts available from various providers. Some of these discounts include:

  • A low mileage discount
  • A student or senior citizen discount
  • A safe driver discount
  • A discount for having an anti-theft alarm system
  • A multi-vehicle or multi-driver discount

You may think that auto insurance discounts are similar from provider to provider, although this is not the case.

For example, one provider may offer a safe driver discount to anyone who completes a driver’s education course. Another provider may only provide this discount to those who have a spotless driving history.

Improve Your Credit Rating

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Car insurance companies review your credit scores each time your policy renews as well as when you shop for new insurance quotes. Unsafe driving practices and lower credit scores have been statistically linked.

Those who have a lower credit score will usually receive a higher premium amount.

It can take several months or longer to improve your credit score, but this effort can be worthwhile. A few ways to improve your credit rating include:

  • Paying down high debt balances
  • Paying bills on time
  • Avoiding taking on new debt

Remember that you can pull a free copy of your credit report from the top three bureaus once per year to learn more about your credit rating.

Bundle Coverage

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Some auto insurance companies also offer a discount for bundling your coverage. There are two primary ways to qualify for this type of discount.

For example, you can insure multiple vehicles under a single policy, or you can bundle your home, life, and car insurance together under the same insurer.

If you choose to bundle coverage with the same provider, it is important to look at the overall or net effect this will have on your budget. Some people may save money on home and life insurance rates as well as auto rates when they bundle their coverage.

However, if your auto insurance rates drop while your other rates increase, this may not be a cost-effective option to move forward with.

It can be disheartening and even stressful to learn that your car insurance provider is raising your rates after just being in a single accident. In some cases, you may not be able to afford the higher premium rate and may wonder how you will pay for the insurance you need.

Thankfully, there are numerous options to consider if you want to lower your auto insurance premium. For the most significant level of savings, consider employing all of these previously-mentioned tips.

Here’s another tip: Start comparison shopping and get the best auto insurance rates today by entering your ZIP code below!

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