Everyone hopes that they will not be in an auto accident or have to deal with everything that this situation entails. However, sometimes this is sometimes an inevitable situation that cannot be controlled. When such an incident occurs, you will find yourself wondering, how does an accident affect insurance premium?

After an accident, those involved will need to file a claim with their insurance companies. At times, this simple, but necessary process will make ones monthly rates go up, especially if the claim is a costly one. Some companies will give you a grace period for the first claim, but on the second claim that is filed, your rates will go up.

Any insurer will check to see who was at fault in the accident in consideration. If their policyholder was found at fault, this will usually lead to a higher premium. Those who are found to be not at fault should not be at risk unless they have been in a number of recent accidents. This could cause an insurance company to review their policy and make necessary changes.

When a claim is submitted to an insurance company, this will often keep an individual from receiving a certain discount that they may have otherwise qualified for. Many companies will have safe driving discounts or accident free discounts that are quite substantial. But one can only be awarded such a discount if they indeed have a history that is free of accidents.

Some insurance companies set a standard or requirement for the number of claims that are allowed to be filed. Even though this may be essentially not under an individuals control, when and if this threshold is reached, the company may decide to terminate the policy altogether. This is bad news for the individual, who will likely have a hard time finding affordable or desirable rates from an insurer Cialis Jelly because of such a situation on their history.

Insurance companies need to stay in business, too, and they will do their best not to cover individuals whose expenses are continually higher than that they are paying. So if you have great coverage and an attractive premium, if the accident you are considering only features slight damage requiring minimal cost to fix, you may wish to reconsider filing that claim. It may end up costing more in the long run if you lose your policy or are forced to pay higher rates.

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Category: Finance/Insurance
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