A car accident can really spoil your day, no matter how minor the collision. If it’s the first time it’s happened to you, the after-accident distress can be quite disrupting. Your insurance agent should be one of your first calls after everyone’s safety is assured. The agent can help you with the post-accident process. Keeping an incident from your insurer is a bad idea and it could jeopardize your car insurance coverage.
In the already expensive Ontario car insurance market, your thoughts will eventually turn to how the accident will affect your car insurance. There are circumstances where a single accident could raise your premiums. There are also ways you can emerge with your car insurance rates intact.
Car Accident Fault
Much of the insurance impact of an accident has to do with how fault is assigned. If you’re not at fault, it’s unlikely your premiums will increase. If you are completely or partially at fault, however, you could be affected.
First of all, fault determined by an officer on the scene of an accident has nothing to do with fault determination for insurance purposes. The Ontario Insurance Act sets out fault determination rules which insurance investigators consult to match the accident you’re in to a fixed set of scenarios. For insurance purposes, someone is always assigned fault, which may not be the case with police investigations.
One notable exception is when a traffic violation resulting in a charge contributes. A conviction on a charge arising from the accident will likely have its own effect on the driver’s insurance premiums.
Some insurance companies offer accident forgiveness as a feature of their policies, but these companies are few. However, many sell accident forgiveness coverage as a policy endorsement. This is a special feature that means that your first accident where you have more than 25 percent fault will not affect your insurance premiums. You’ll be paying a bit for this with each installment on your car insurance, but it may save you over the long term. Protecting your driving record and claims history is the most effective control you have over your own car insurance costs.
Again, accident forgiveness coverage will have limited effectiveness if the accident was due to a serious traffic offense. A drunk driving conviction, for example, would drive rates up so far that savings from accident forgiveness would be unnoticeable.
Effects of a Single Accident
While your insurance premiums are likely to rise with an at-fault accident, there are things you can do to minimize the impact of an accident. You aren’t required to file an insurance claim after an accident. If it is minor and repairs don’t exceed your deductible by much, it may not be worth involving your insurance company. While the accident will remain on your record, a claim will not. With the competitive market in the province, it’s also likely that, if rates rise with your current insurer, there’s another company who will give you a better rate. Use Ratelab’s car insurance calculator to investigate the market.
One accident will not jeopardize your policy. Insurance companies file operating rules with the Financial Services Commission of Ontario, which approves them. Typical rules cover under what conditions a company would reject or cancel policies. An insurer that cancelled policies after a single claim would soon find itself short of clients.