How One Accident Can Affect Your Annual Auto Insurance Premium

The police may not have found you to be at-fault. You may feel like there was nothing you could have done to avoid the accident. But the insurance company says you're "at-fault"! What does this mean? How will it affect your insurance premium?  Let's see...

What is an "at-fault" accident?
In the eyes of auto insurance companies, there is always someone who is "at-fault" in a car accident. If the police say the accident wasn't your fault, all this means is that you are not going to be charged criminally for causing the collision. But car insurance companies have their own definitions of "at-fault."

If you are the only driver involved in the collision, you are automatically "at-fault" if you file a claim with your car insurance company. This means, in the winter if your car slides on icy road and wraps around a telephone pole - you are "at-fault." If you swerved to avoid hitting something in the street and your car ended up in a ditch - you are "at-fault."

If you were involved in an accident with another vehicle, then it gets complicated. The insurance company must follow the rules in their province for determining who's at fault. These rules are very specific and can be applied to almost any possible road collision scenario. For example, if you rear-end someone - you're at-fault. If you make a lane change and sideswipe someone who is in your blindspot - you're at-fault. Even if you don't file a claim with your own insurance company, the other driver involved might. That leaves you with the "at-fault" accident on your auto insurance record, and most likely a hefty rate-hike on your policy.

What happens to your auto insurance rate if you have an at-fault accident?
We can't say for sure, but adding one at-fault accident to your insurance record can raise your rates anywhere from 10% to over 100% when the time comes to renew your policy!

An "at-fault accident" on your insurance record stays with you for up to 10 years. This means you'll be paying for that accident over and over until it is cleared from your record.

Accident forgiveness
A few car insurance companies advertise a service called "Accident forgiveness." If you have been with the insurance company for a specified amount of time, and you have maintained a clean driving record (no accidents or tickets), then you might qualify to have your first "at-fault" accident "forgiven." This means if you have an at-fault accident, your premium will only go up a little bit. But if you have a second at-fault accident, the company will remember your first one and you will have two accidents on your record, and you will certainly feel the increase the second time around.

Accident forgiveness can be a great thing - as long as you remember, auto insurance companies may forgive, but they will never forget!

> Back to Top of Page