What to Expect After an Accident

Do you know how an accident affects your insurance premium?

Getting into an accident is a bad experience all-around—even more so if it’s your fault. Since safe driving is rewarded with lower insurance premiums, you need to know what’s at stake if an accident occurs.

• Make sure you’re covered. Each state requires auto owners to carry certain types and amounts of auto insurance coverage. If you have an accident where you are at fault, and you don’t have the appropriate insurance policies, some states will require you to carry an SR-22 form and an additional insurance policy—at additional expense—for about three years after your accident.
   
• Expect to pay. “Running red lights, speeding, drinking alcohol or using your cell phone when the accident occurs is a signal to the insurance company that you’re not a careful driver,” says Andrew Schrage, editor of MoneyCrashers.com, a personal finance site. “Typically, your rate will go up 20 to 40 percent after your first at-fault accident. And you could lose any safe driver discounts you had on your policy.”
   
• Be forgiven. When you add Accident Forgiveness to your Nationwide auto policy, Nationwide will not raise your rates if you have your first at-fault accident. This means significant savings if you have an otherwise good driving history.
   
• Go back to school. Attending a defensive-driving class is never a bad idea, since it can save you up to 20 percent off your basic liability premium, depending on where you live. Taking the class is even more valuable after you’ve had an accident. “In some cities, if you take the class, you can avoid having the accident ticket show up on your report,” Schrage says. “Taking the class can also reduce points on your driving record.”