Can You Switch Insurance After an Accident?
Wondering about changing car insurance after an accident? Get clarity on existing claims and securing new, appropriate coverage.
Individuals involved in an automobile accident often consider their insurance options. Understanding how such an event impacts your current coverage and future policies is important for informed decisions. Clarity regarding your insurance standing can help navigate the process.
Managing Your Current Accident Claim
The insurance policy active at the precise moment of the accident is responsible for handling any related claims. Your existing insurer will process all claims for damages or injuries stemming from that incident, irrespective of any subsequent changes you make to your policy. Promptly report the accident to your current insurer, ideally within 24 to 72 hours, although some policies may allow up to 30 days. Provide accurate details, including the date, time, and location of the accident, along with information about other drivers and vehicles involved.
Cooperating fully with your current insurer throughout their claims process is essential. This includes providing any requested documentation, such as a police report, photos of the damage, and contact information for witnesses. An insurance adjuster will review these details to assess the damage and determine the payout. The resolution of the claim will remain with this insurer, even if you decide to switch providers later.
Navigating Policy Changes After an Accident
While you can seek new insurance coverage at any point, a recent accident significantly influences this process. A new insurance policy will not provide coverage for an accident that occurred before its effective date. Insurance policies are forward-looking and do not offer retroactive coverage for past incidents.
A recent accident can lead to higher premium calculations across various insurers, not solely your current one. This is a standard underwriting practice, as insurers assess risk based on factors like fault, accident severity, and your driving history. An at-fault accident can result in an average annual premium increase of around $750, though this can vary significantly based on the damage caused and individual state regulations. This increase typically lasts for three to five years.
An accident can also impact any no-claims bonuses or loyalty discounts you may have accumulated. A no-claims bonus rewards claim-free driving with reduced premiums, but making a claim, especially an at-fault one, can reduce or eliminate this discount. Some policies offer “accident forgiveness” or “no-claims bonus protection” for an additional cost, which can help mitigate these effects. Loyalty discounts may also be affected, as insurers may reassess your risk profile.
Securing New Auto Insurance Coverage
If you choose to pursue new auto insurance coverage after an accident, the process involves specific steps to ensure a smooth transition. You will need to gather essential information for obtaining quotes, including personal details such as your date of birth and driver’s license number, as well as vehicle information like the make, model, and Vehicle Identification Number (VIN). Details of your driving history, including the recent accident, will also be required by prospective insurers for accurate rating purposes.
The process involves comparing quotes from multiple providers to find a policy that meets your needs and budget. Review the coverage limits and deductibles of any new policy to ensure they align with your previous coverage. Once you select a new policy, coordinating the effective date of the new coverage with the cancellation of your old policy is critical to avoid any lapse in coverage. A gap in coverage can lead to higher premiums in the future and potential penalties in some states.
After your new policy is active, formally cancel your old policy. You can typically do this by contacting your previous insurer directly, often by phone or by sending a cancellation letter. Your former insurer may provide a prorated refund for any unused premium, though some may charge a cancellation fee. Confirm any cancellation fees or refund policies with your current insurer before making the switch.