Car Insurance and Two Accidents: What to Do Next

June 25, 2013

When it comes to your car insurance, two accidents for which you submit claims will usually always have some sort of affect on your policy. Your rates may increase, and in some cases, the insurance company may even refuse to renew your policy. So here is some information on car insurance after two accidents.

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Accident Forgiveness

These days, most major car insurance companies offer some sort of accident forgiveness program. Companies like Allstate, AIG, Geico and Progressive all have some sort of program that forgives insured drivers participating in the program in the event of an at-fault accident.

The way the program works is pretty simple. If you are involved in an accident where you are found to be at fault, an accident forgiveness program will guarantee that rates are increased at only minimal amounts, and in some cases, not increased at all. This type of forgiveness is usually an add-on option for most policies offered by the companies that provide it.

However, even with an accident forgiveness program, a second at-fault accident will usually cause your insurance premiums to rise considerably. Nonetheless, accident forgiveness programs can help you avoid cancellations or an insurance company refusal to renew your policy. One of the most advantageous parts of an accident forgiveness program is that if you are involved in accidents where you are not at fault, the insurance companies do not penalize you in most cases.

Rates Can Increase Regardless of Fault

Unless you are enrolled in an accident forgiveness program with an auto insurance company, your coverage is subject to cancellation or rate increase any time a claim is made. Some insurance companies will choose to raise your rates simply if you make a claim and request payment under the terms of the coverage policy. For instance, some insurance companies will choose to raise rates after one accident - even if you were not at fault in the accident.

While there are some states that regulate this type of activity and even prohibit it, some states do not. In states where insurance companies are not heavily regulated, this type of punishment for filing claims is not uncommon. So, with less reputable insurance companies that are quick to cancel policies, you'll usually never have the chance to file two claims with the company.

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It Does Not Last Forever

Fortunately, regardless of the number of accidents you have on your driving record - whether it be with the state Department of Motor Vehicles or with your insurance company - the accidents do not remain on your record forever. In most states, insurance companies are only allowed to penalize you for past accidents or driving violations that occurred within the last five years preceding the issuance of a car insurance policy.

So, if you can continue to drive safely for at least five years, the accidents should disappear from your driving record and you will be able to once again get preferred safe driver discounts on your car insurance.

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