What Happens to Your Auto Insurance Rates After a Collision?

As a car owner in Massachusetts, you have to get a certain amount of insurance coverage on your vehicle that is driven and registered in the state. It’s a no-fault state where your insurance will cover a specified amount of injury claims, irrespective of who caused the collision.  Massachusetts insurance laws also make it mandatory that anybody who owns and operates a vehicle on the state roads pay their premiums on time. But, have you ever wondered what happens to those premium payments if you were to get into an accident?

Here’s what will happen.

Do You Have a Clean Record?

Your insurance payments depend on factors such as your driving record, the city that you live in, and other rating factors approved by the insurers.  Massachusetts insurance laws offer you injury claims whether or not the collision was caused by you. So, anything like repeated claims, at-fault versus other driver’s fault claims, and the amount claimed, increases your risk profile. A collision will certainly impact your rating.

Your Insurance Rates Go Up

If you have claimed insurance before, then it will hurt your insurance rates. That means that the rates will go up after an accident, especially if it is not your first.

You may not be aware of it, but your auto insurance rates are likely to go up by about 44% after a collision.

In a research report released by Quadrant Information Services in 2017, they found that insurance rates went up by 44.1% for a single auto claim filed by drivers. If there was a second claim filed, then rates went further up and reached 99.4%, which was double the amount of what you paid earlier.

Exceptions to Rate Hike

There are a couple of exceptions to your insurance rates going up after an accident. If you have had a clean track record and are filing a claim for the first time, then the insurance company is less likely to penalize you. Another exception is when it has been established that the accident was the complete responsibility of the other driver.

Collisions Will Shadow You

So, you have filed a claim, and the insurance company spikes your premiums. Why not be smart and switch insurance companies and get a lower premium?

That is not going to happen. Every insurance claim you file (weather property, or auto) will be recorded in your CLUE (Comprehensive Loss Underwriting Exchange) report. This report goes back seven years. So, even by switching companies, you may end up paying a higher auto insurance premium.

How Long Do You Pay The Higher Rates?

Insurance companies will charge you a higher premium for a period of three to five years. This is regardless of you continuing with the same company or moving to a different insurance provider. Insurance companies will charge you higher premiums for only three to five years, depending on your claim.

I was Not Driving When the Accident Happened

This is a frequently heard statement from car owners when filing a claim. The heartbreaking truth about Massachusetts insurance rules is that your car insurance follows the car, not you.

So, even if you weren’t driving and your car gets into an accident, you can still end up being penalized for it in terms of higher rates for three to five years and a negative mark on your CLUE report.

Now that you know the impact a collision can have on your car insurance rates, it is best to drive safely. Also, get a comprehensive coverage plan that allows for greater flexibility and lower payments for the complete protection of your car and you.

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Interesting related article: “What is Insurance?”