Will My Car Insurance Rates Go Up Because I Hit Someone Without Causing Damage?

The price of car insurance can depend upon many different factors. While your demographic profile and location are important for determining the final cost of your car insurance policy, your accident history is likely to play an even larger role. Car insurance companies tend not to trust customers who frequently become involved in accidents. If you've been involved in several accidents within the past three to five years, chances are good that your insurance rates are higher than those paid by your "safer" peers. Even if you think that you're an excellent driver, your insurance company must use the information at its disposal to make an informed decision about the cost of your insurance. It's unlikely to make allowances for drivers who believe that they've been unfairly overcharged.

Unfortunately, you may feel as if you're being overcharged after becoming involved in a minor accident. This is because most insurance providers treat virtually any at-fault accident in which one of their policyholders is involved as a serious transgression. Although there are different "classes" of accidents, even minor accidents that produce no injuries and require only minor repairs can cause the at-fault party's insurance premiums to rise considerably.

If you're involved in an accident that causes serious injuries or major property damage, your insurance premiums could rise by between 50 and 100 percent after your next policy renewal. If the accident involved alcohol or illegal drugs, your premiums could rise by an even wider margin. In fact, such an event might cause your insurance company to drop your coverage. This would require you to procure coverage through your state's "high-risk" insurance pool. Without a substantial financial buffer, you'd quickly become unable to afford your premiums.

If you're involved in a more minor accident, there's a possibility that your premiums won't rise at all. Most insurance companies have a "damage cutoff" that determines when and by how much their policyholders' post-accident premiums must rise. In most cases, these cutoffs are set at between $500 and $1,000. As such, they're typically surpassed by serious damages. Only minor dents and scratches cost less than $500 to $1,000 to fix.

Assuming that the accident in which you're involved causes such minor damages, your insurance company will either ignore it or treat is as a "free pass." In the first case, no record of the accident will remain on your driving history. In the second case, a record will remain on your history without affecting your premiums.

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