In the immediate aftermath of a Ridgeland, MS car accident, most people’s thoughts turn to their physical injuries and how they’ll pay for their medical expenses and car repairs. No one thinks about the long-term impact a car accident can have on their finances and insurance rates until one day you open your car insurance bill and are hit with sticker shock.
Once the initial trauma of the auto wreck wears off, you may need help understanding how your car insurance rates after an accident are affected.
How Insurance Companies Decide Whether to Raise Your Rates
Car insurance is a for-profit industry where insurers hedge their bets. If you pay your premiums on time, have a good driving record, and have no history of accidents, your rates may remain relatively stable. Drivers like this are safe investments. However, those involved in one or more car accidents are riskier bets because insurers must pay out money to resolve these claims, thereby eating into their profits.
This may be a simplified explanation, but insurers are taking calculated risks when deciding whether to raise an individual’s car insurance rates. Common factors that an insurance company will use to help it determine where it should set its rates can include the following:
- Your location
- Your age, gender, and marital status
- Your driving history
- Your accident or past claims history
- The cost to replace your specific vehicle
- Your annual mileage
- Your credit score
- The type and amount of coverage you want
Your rates are largely determined in response to the insurer’s risk assessment. Younger men are more likely to be involved in accidents and engage in riskier driving behaviors than older drivers. Therefore, they pay more. The same applies to drivers with multiple accidents on their record or motorists who drive high-value cars. An insurer views these drivers as riskier because, if and when an accident occurs, they will have to pay more to settle the claim.
Does Fault Matter for Insurance Rate Increases in Mississippi?
Yes. Fault may play a role in insurance increases after a car accident in Mississippi. Again, it comes down to risk for the insurer.
If a driver is responsible for causing a crash, they are generally going to experience a more significant rate hike because there’s more risk to insure them than other drivers. If their careless actions caused the crash, their unsafe driving behaviors make them a greater financial risk to the insurer. Increasing premiums for those drivers helps offset the insurer’s financial risk or forces the individual to seek insurance from another provider, taking the risk off the original insurer’s plate altogether.
When an individual is not at fault for the accident or their share of fault is minimal, rate hikes can be minor or non-existent, depending on the circumstances. Drivers with shared fault can see their rates increase, but perhaps not as significantly as those of at-fault drivers. However, drivers should remember that rate hikes can vary by company and may be subjective.
Will Your Rates Increase If the Other Driver Was at Fault
Maybe. The answer depends on the circumstances of the accident. When the other driver is at fault, but your actions also contributed to the cause of the crash, you may see a slight to moderate increase in your rates. If the other driver is primarily at fault, small increases in your premiums may still apply, depending on your insurer. Often, drivers who are not at fault and do not file a claim with their insurance company generally see little or no increase in their rates.
Can Insurance Rates Increase Even If You Were Not Ticketed?
Many drivers feel like they are in the clear when law enforcement arrives on the scene and does not issue them a ticket for the accident. That scenario can offer a false sense of security because insurance rates can spike, even without a ticket on your driving record.
Filing a claim with an insurer may automatically lead to higher rates, as it signals that the individual may be a future risk. Individuals may also have “claims-free” or specific discounts that can be lost following an accident. Losing these discounts also leads to higher rates.
Steps You Can Take to Minimize Insurance Rate Increases
No one wants to open their car insurance bill only to see their rates have gone up. There are steps you can take to help insulate yourself from dramatic insurance rate increases, such as the following:
- Keeping a clean driving record
- Improving your credit score
- Seeing if your insurer offers discounts for taking approved safe driving courses
- Shopping around to see if other providers offer better rates or discounts
- Combining insurance policies under one provider for more discounts
- Incorporating alternative transportation to lower your driving mileage
First and foremost, focus on safe driving habits. Next, if you want lower rates, reach out to your insurance carrier. There may be discount programs you are unaware of, so ask your insurer what you can do to bring down your bill.
Mistakes to Avoid That Could Lead to Even Higher Premiums
While there are proactive steps you can take to help lower your premiums, mistakes before and after an accident can lead to even higher rates. Avoid the following pitfalls to help protect your rates:
- Making too many small claims on your policy
- Failing to update your insurance policy during life-changing events, such as marriage or adding a teen driver
- Not asking for discounts
- Not reviewing your unique needs
- Underinsuring yourself
- Not striking the right balance between deductibles and premiums
- Misrepresenting the facts, such as where you live or who you are insuring
- Giving a recorded statement to an insurer after an accident without legal representation
Understand that sometimes rate increases due to inflation and the rising cost of car repairs may be beyond your control.
Contact Derek L. Hall, P.C., for Help After a Car Accident in Ridgeland, MS
The last thing you want to worry about after a Ridgeland, MS car accident is an increase in your car insurance rates. At Derek L. Hall, P.C., our experienced legal team can help you manage every aspect of your claim and pursue the compensation you deserve for your injuries. We can also walk you through the steps to take to protect yourself from significant rate spikes.
Contact our office today to schedule your free, no-obligation consultation to get started.