Can I Switch Insurance After an Accident?

You can switch car insurance providers after an accident. While an accident introduces complexities, it does not prevent you from seeking a new policy. Drivers often consider changing insurers after an incident, aiming for better rates or improved service. However, it is important to understand how such a change impacts both your existing claim and future insurance costs.

Managing Your Active Claim

The policy active at the time of the accident handles that claim. If you switch insurers after an accident, your original provider remains accountable for processing and settling it, as a legal contract existed when the incident occurred, binding them to their obligations regardless of your current insurance status. Your new insurer will not handle prior incidents. You must continue cooperating with your former insurer, providing any necessary documentation for resolution. Switching companies does not speed up or delay payout, but requires managing communication with both providers.

How an Accident Affects New Insurance

A recent accident significantly impacts how new insurers assess your risk, influencing eligibility and premiums, as they calculate premiums based on risk and an accident on your driving record suggests a higher likelihood of future claims. For an at-fault accident, rates can increase substantially, with an average annual increase of around $750 across the United States; some companies may raise rates by approximately 50% or more. Even a not-at-fault accident can lead to higher rates, especially if you have filed multiple claims within a short timeframe, as this can still indicate increased risk to an insurer. Accidents typically remain on your insurance record and affect rates for three to five years, though this duration can vary depending on the insurer and the severity of the incident. New insurers will review your driving history, using this information to determine your new premium and potentially adjust available discounts.

Steps for a Policy Transition

When transitioning to a new insurance policy after an accident, maintain continuous coverage to avoid potential penalties or gaps. Secure your new policy with an effective date that aligns precisely with, or slightly precedes, the cancellation of your old policy, ensuring you are never uninsured and avoiding legal issues and higher future rates. Once your new policy is confirmed, inform your current insurer of your decision to cancel. You may need to provide a written notice, and you should inquire about any potential cancellation fees or refunds for unused premium portions. While you can switch with an open claim, some sources suggest waiting until the claim is largely settled to simplify the process; however, your original insurer remains obligated to handle the claim irrespective of your policy transition.