Having one accident is bad enough. Assuming no injuries, there’s still the hassle of insurance claims, car repairs and getting around as you wait for those repairs. While car insurance removes many of the stings and hardships, it’s still not a pleasant experience people look forward to having.
When more than one accident happens to a single driver, there’s more than just an inconvenience to consider. It’s possible that these incidents could seriously affect the price a driver pays for car insurance. In extreme cases, a driver may lose the ability to buy insurance through the regular market.
How does an accident weigh on my car insurance costs?
It’s possible that an accident has no effect on your car insurance premiums at all. It depends on how an insurance investigation assigns fault. If you’re in an accident, but the investigation determines the other driver is entirely at fault, then you should see no increases to your car insurance premiums.
There are a couple of things to know, however. Insurance investigation findings may have nothing to do with police investigations. A driver charged with causing the accident may not be responsible in the view of the insurance investigator. While all provinces have their own specifics, when we look at Ontario, the no-fault provisions in their auto insurance programs includes standard fault determination rules and scenarios.
An accident under insurance investigation is compared to over 40 standard scenarios. When the investigator finds the closest match, then the scenario determines which driver is at fault, and how much. This ranges from 100 percent fault to 50 percent, both drivers bearing equal responsibility. While this permits quick identification of liability after an accident, it doesn’t allow for the unique circumstances of individual collisions.
The fault determination process does permit quick settlements for the aspects of insurance coverage that are paid out by the driver’s own insurer – the no-fault aspects of auto insurance, which all provinces have in greater or lesser degrees.
It’s also possible that a driver could be charged with a traffic offense but found not at fault by the insurance investigation. While the accident won’t affect premiums, the traffic offense will.
How does more than one accident affect me?
It depends on the nature of the accidents. If you’re not at fault in any of them, you may not see repercussions when you renew your policy. If you have more than 10 percent responsibility in one or more accident you will likely see your costs go up.
At the other end of the spectrum, if you’re 100 percent at fault in each accident, costs will not only go up, but they will be expensive increases. If insurance fault is accompanied by traffic violations, the situation is even more expensive.
Not only do additional incidents increase your insurance costs, you approach the point where your insurance company may refuse to issue a policy. Each company has a preset level, often a combination of accidents, tickets or other claims, at which they will inform you that your policy will be cancelled or not renewed. This will be in writing, including reasons why, and in advance, so you have time to make other arrangements.
Drivers who cannot buy a policy in the regular insurance market can turn to the Facility Association in provinces with private insurance providers. Provinces with public insurance have similar methods for residual auto insurance consumers.