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Every year, there are millions of car accidents in the U.S., which lead to a complex net of insurance claims as victims seek compensation for their losses. On top of that, the worry about how an accident might bump up your insurance premiums can make a tough situation even harder.
In this article, we’ll break down exactly what affects your insurance rates, share tips to keep those rates low, and guide you through what to do if you have an accident in Indiana.
Factors That Influence Insurance Premiums
Several factors can influence your insurance premiums, including your driving history, claims history, and whether you were at fault in the accident.
Let’s take a closer look at each of these factors and how they can impact your premium rates:
Driving History
Your driving history plays a significant role in determining your insurance premiums. This is because insurance companies consider factors, such as traffic violations and accidents, to calculate your rates.
For example, if you have a history of speeding and the insurance company considers you a higher risk, it could increase your premiums. Similarly, if you have been involved in previous accidents, especially those where you were at fault, your rates will probably go up.
Claims History
Your claims history is another crucial factor in determining your insurance premiums. A history riddled with frequent claims is a red flag for insurance companies!
In fact, insurance companies view a pattern of claims as indicative of high-risk behavior, which naturally results in elevated rates. On the other hand, if you have a clean claims history, you may be eligible for lower premiums.
At-Fault Accidents
When considering your driving history and claims history, at-fault accidents often have a more detrimental impact on your premiums compared to incidents where you were not at fault. Additionally, the severity of the accident and the resulting damages will also influence the rate increase.
For instance, a minor fender bender will not impact on your premiums as much as more severe accidents with extensive damages or incidents where you were at fault, like reckless driving accidents.
Ways to Avoid Insurance Premium Increase
While you may not be able to control all the factors that influence your insurance premiums, there are steps you can take to help prevent your rates from rising.
On the one hand, it’s imperative to maintain a clean driving record and practice safe driving habits. Overall, obeying traffic laws is your best bet to keep your premiums in check.
Additionally, defensive driving courses and installing safety features in your vehicle can also contribute to a more favorable insurance profile.
Lastly, you can choose a higher deductible to lower your premiums (although this also means you’ll pay more out of pocket for property damage after an accident); or bundle your insurance policies with the same provider (as this usually results in multi-policy discounts).
The Process of Evaluating Insurance Premiums
Insurance companies consider multiple factors to calculate premiums, which are generally based on the level of risk a policyholder presents.
This process, also known as underwriting, involves assessing the likelihood of a policyholder filing a claim and the potential cost of that claim, which then determines the premiums. So, to calculate your premiums, insurance companies will most likely consider things like:
- Age and gender
- Marital status
- Credit history
- Vehicle type and model
- Annual mileage
- Location
- Claims history
- Driving history
Insurance companies can increase insurance premiums for a reason or for no reason at all. Sometimes an increase in auto insurance premiums is unrelated to activities of a particular policyholder and is instead connected to other factors, such as inflation and general risky behavior of other drivers.
Steps to Take After an Accident in Indiana
After an accident, it’s crucial to follow specific steps to minimize the impact on your insurance premiums. After checking for injuries and moving to a safe location, you may also want to do the following:
Step 1: Exchange contact and insurance information with the other driver(s) involved in the accident.
Step 2: Take photos of the accident scene, including any damages and injuries.
Step 3: Notify your insurance company.
Step 4: Hire a lawyer to help you handle every step of the legal process.
If you’re dealing with complex insurance claims or have been injured in an accident, it’s essential to consult with an experienced personal injury lawyer in Indiana. Reach out to our team at Christie Farrell Lee & Bell and let’s discuss your case and possibilities.