Accidents happen. According to the Insurance Information Institute, 218,084,465 licensed drivers were involved in motor vehicle crashes in 2015. That’s a lot of crashes. Some accidents are serious collisions with fatalities. Others are merely fender benders. When you’re involved in an accident, though, even a minor one is a big deal. In addition to the immediate consequences, a crash can have a long-term impact on your car insurance premiums.
California uses a fault or tort system of car insurance law. This means that the insurer of the person who causes the car accident is expected to pay for damages. Therefore, what happens to your car insurance premiums depends largely on who caused the crash.
- Your fault: If the accident was your fault, you can expect your car insurance premiums to increase the next time your policy renews. One way this can happen is if you lose a discount you had been receiving. California has a law that requires insurers to provide a Good Driver Discount to qualifying individuals. The most important factor in determining whether a driver qualifies is the driver’s safety record, so causing a crash is a major disqualifier. If you lose the discount because you caused a crash, your rates will increase.
- Not your fault: In some states, your car insurance premiums may increase after an accident that was not your fault. In fact, the Consumer Federation of America found that the increase for a not-at-fault accident can be as high as 16.6 percent. In California, however, this does not happen. If the accident is determined not to be your fault, you don’t need to worry about rising rates. It’s another reason to love living in the Golden State.
- Partially your fault: Sometimes the accident is only partially your fault. The rest of the fault may lie with another driver, a pedestrian or even road conditions. According to California law, you will be considered principally at fault – in other words, the accident is mostly your fault – if you’re determined to be at least 51 percent at fault in an accident with at least $750 in damages.
Other factors can also influence how much an accident affects your car insurance premiums. For example, if you’re convicted a DUI, you can definitely expect a premium hike once you regain your driving privileges.
Accidents don’t stay on your record forever, but they do remain for a long time.
In California, most points stay on your record for three years and three months. This includes most accidents, as well as other violations. Very serious violations, however, can stay on your record longer. Points from a DUI, for example, stay on your record for 13 years.
The best way to keep your car insurance rates down is by being a safe driver. Did you know that texting while driving and other forms of distracted driving cause thousands of traffic fatalities every year? Take the Dashers Pledge to stop distracted driving.