Accidents almost always make your insurance rates increase. Whether or not the accident was your fault, your insurance company may have to pay for your involvement in it. Most 'at fault' accidents result in an increase in premium, because the accident will get rated against all of your coverages. When supply decreases and demand increases, costs get more expensive.
If you did not carry enough insurance at the time of your accident you may now be required to carry more insurance. Carrying more insurance equals higher premiums. Some companies may not want to offer you insurance coverage at all after you report an accident.
As I stated earlier, when you are involved in an accident your insurance company may have to pay for your claim - even if the accident was not your fault. These types of coverage - Personal Injury Protection, Medical Protection, Uninsured Motorist, and Collision - will cover you and the people in your vehicle when the accident is not your fault.
If you are 'at fault' for the accident, theses types of coverage - Personal Injury Protection, Property Damage Liability, Bodily Injury Liability, Medical Payments, Collision, and Other than collision - will help cover you, the people in your vehicle, your vehicle, the other party, and the other's party's property.
Now, if you are 'at fault' for the accident, there are various reasons why your rates will increase. The first is having your current insurance coverage premium's reflect the charge for this accident. Insurance companies usually charge 'points' to your policy at its renewal. Depending on the insurance company, these points will be charged to your policies for three, five, or even seven years.
The next more expensive rate will be if your state requires that you carry an SR-22. You will need to carry this form and its necessary coverages if you did not have enough insurance at the time of the accident. Getting an SR-22 will cause you more money and even more aggravation by spending time getting this offense taken care of.
You will need to carry this form and its required coverages for three years - whether or NOT you own a vehicle. There are some insurance companies who do not write SR-22 policies. To make sure you are carrying enough insurance to avoid this form and its required coverages, contact your state's Department of Motor Vehicles.
Another way an accident can increase your rates is due to the basic macroeconomic terms, which I am sure everyone has heard of, supply and demand. When the supply is high and the demand is low as a result the price is low. Conversely, when the supply is low and the demand is high the result is the rates are higher.
This principle also applies to car insurance. When you are 'at-fault' in an accident, there are some companies who will not insure you. You have just cut the supply of insurance companies and increased your demand. As a result, your rate is higher. Like stated previously, some insurance companies will not write SR-22 policies. This further lowers the supply of insurance companies and further increases your demand. And, as a result, you will have a higher insurance rate. And when you add the insurance 'points,' you can see how expensive an accident can be.
Take preventative measures to avoid accidents. Avoid distractions, be aware of your surroundings, and do not drive in adverse weather conditions, if you have a choice. As you can see, an accident can have an impact on your rates, especially if you are at fault for it.