When you have an accident, your insurance rates are probably not the first thing on your mind. But after the dust has settled and the claim is complete, the ramifications of that accident may become clearer. Whether or not you see a surcharge on your insurance for the accident in question depends on one main factor: who was at fault.
The insurance company will determine who was at fault in an accident based on all of the information that is available about the accident. They will consider police reports, eyewitness statements, the appearance of the damage to the cars and the accident site, and of course the word of both drivers. They will then decide who carries the burden of responsibility for the accident. In some cases, the fault may be shared, but any time you are not found to be fault-free, you have had an at-fault accident.
Its important to remember that no-fault insurance, which exists in several provinces, does not mean that no one is at fault in an accident. Instead it refers to which insurance company will pay for the damages. In a no-fault province, your insurance company pays the claim regardless of fault.
Of course, if no other driver is involved, you will be found at fault regardless of circumstances such as road conditions or distractions on the road.
If you are found to be more than 50% at fault in an accident, you will see an increase in your rates on the next renewal of your policy. How long the insurance company will charge you for the accident depends on the company but the usual is about three years. In some cases, the amount of the surcharge will decrease each year until it falls off.
If you have a second at-fault accident before the first one has fallen off your insurance record, you will see an even larger increase. After the first accident is no longer chargeable under your insurance companys rules, any subsequent accident will be charged at the first accident rate.
When you are found to be not at fault in an accident there will be no charge on your insurance. The other driver will bear the responsibility for the increase in rates in this situation.
One of the newest features in auto insurance is accident forgiveness, in which your insurance company disregards your first accident in terms of rate increases. This is not a standard feature in insurance policies, and must be added to the policy usually for an extra premium.
It is important to remember that accident forgiveness has some caveats. It will not apply in all situations; any accident where charges are laid against the driver may result in accident forgiveness being forfeit. It is also important to note that accident forgiveness does not follow you to a new insurance company, so if you change companies they may put a surcharge on your rates for the accident. Be sure you know all of the fine print involved in accident forgiveness.
When an accident occurs, the insurance company must determine why it happened and what mistakes were made that led to the accident occurring. In most cases, fault is fairly clear, but sometimes it can be more complex to determine. Once the insurance company has made a decision, you have the right to appeal it. However, the final decision about fault means that someone will pay a surcharge on their insurance. This helps to keep insurance rates lower for everyone in the end. If you are found at fault in an accident, remember that the charge will not last forever and your rates will go back down in a few years.
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