6 Ways to Lower Your Insurance Premiums Following an Accident

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  • An at-fault driver can be hit with a rate increase of 40% or more.
  • Accident forgiveness coverage means the insurance company will forgive the first at-fault accident.
  • Switching to usage-based coverage can help you minimize the damage of a higher rate.

Adding insult to injury, your policy rate may soar following an accident.

If you're involved in an accident and found to be at fault, your auto insurance rate can soar by 40%. While the rate hike won't last forever, you're looking at three to five years of higher payments. If you find yourself dealing with higher insurance premiums following an accident, here are six steps you can take to land a lower rate.

1. Ask about accident forgiveness

More insurers offer accident forgiveness than ever before. Before worrying too much about whether your rate is going to go up, ask your insurer if your policy includes forgiveness. Your best bet is to purchase auto insurance from a company offering accident forgiveness before an accident ever occurs.

2. Shop for a new provider

With a fresh accident on your driving record, you may have to do a bit of legwork to find an insurance company that can offer you a lower rate. Still, before settling into three to five years of increased payments, make sure there's not a better option available. Gather quotes from multiple providers so you can compare prices and coverages.

Note: Before shopping for a new provider, check your credit score. Many drivers are unaware that insurance companies take a driver's credit score into account as they determine rates. If your credit score is lower than you'd like, take steps to give it a boost before applying for a new policy. Once your credit score is strong enough, you may be able to get a lower rate with a new insurer.

3. Check out discounts

Most auto insurance companies offer a full menu of discounts. It's possible they've added new discounts since you first purchased your policy. Here's a quick rundown of some of the most common policy discounts:

  • Multi-policy discount
  • Anti-theft system discount
  • Student discount
  • Military discount
  • Senior discount

4. Decide whether you need comprehensive coverage

If you have a very old car that's not worth much, dropping comprehensive coverage from your policy will cut the cost. Comprehensive coverage protects your vehicle in a non-collision event, such as a natural disaster or vandalism.

It's not recommended that you drop comprehensive coverage if you're driving a newer car or a vehicle you want to keep for years. One severe thunderstorm without comprehensive coverage could leave you exposed to high repair bills.

5. Check your mileage

If you drive less than 10,000 miles per year, look into a usage-based insurance policy. Here's how it works:

  • You sign up for a usage-based insurance policy.
  • A telemetric device is installed in your car.
  • The device measures things like how many miles you drive, whether you drive the speed limit, and other basic driving habits.
  • Policy discounts are applied based on how well you drive.

Some of the best insurers for usage-based policies are Allstate, Farmers, Root Insurance Geico, Esurance, Nationwide, The Hartford, Progressive, and Liberty Mutual.

6. Speak with your agent

Your insurance agent not only knows the specifics of your policy but also understands the ins and outs of the insurance carrier. There may be rate-cutting tricks that you haven't heard about. For example, the company may reduce your rate if you complete a defensive driving course. Take advantage of your agent's expertise by reaching out.

An auto accident can have a long-lasting impact. You may be dealing with anxiety about what happened or frustration over how long it's taking to get your car back on the road. Try to remember that none of this is going to last forever. By practicing safe driving habits, the accident will eventually fall off your driving record, and you'll be back to paying a normal auto insurance rate.

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