What Happens to Your Insurance When You Hit a Car?

When you hit another car, understanding your auto insurance policy’s implications is important. This guide explains the types of coverage relevant to such an incident, the necessary actions following a collision, the insurance claims process, and the potential consequences for your policy.

Understanding Your Insurance Coverage

When you are at fault for hitting another car, specific insurance coverage addresses damages and injuries. Liability coverage is foundational, designed to cover costs for the other party. This coverage divides into two components: bodily injury liability and property damage liability. Bodily injury liability helps pay for medical expenses, lost wages, and pain and suffering for others injured in the accident, including pedestrians or individuals in another vehicle, and can cover legal fees if you are sued.

Property damage liability covers repairs or replacement of the other party’s vehicle or other property damaged in the collision, such as fences or buildings. Most states require drivers to carry a minimum amount of liability insurance. Your liability limits determine the maximum amount your insurer will pay for these damages.

Collision coverage addresses damage to your own vehicle. It pays for repairs or replacement of your car if it hits another vehicle or object, regardless of who was at fault. If you have a car loan or lease, your lender often requires you to carry collision coverage to protect their investment. This coverage involves a deductible, which is the amount you pay out-of-pocket before your insurance covers the repair costs.

Beyond covering damages to vehicles and property, policies may include medical payments (MedPay) or personal injury protection (PIP) coverage. MedPay helps cover medical expenses for you and your passengers, regardless of who caused the accident. PIP provides broader coverage, including medical expenses, lost wages, and essential services for you and your passengers, regardless of fault. While MedPay is optional in most states, PIP can be mandatory in certain states.

Steps to Take After an Accident

After hitting another car, immediate actions at the scene are important for safety and gathering information for insurance claims. First, ensure everyone’s safety by moving vehicles out of traffic if possible and checking for injuries. If there are serious injuries or significant property damage, contact emergency services, including the police. Obtaining a police report is beneficial as it provides an objective, third-party account of the incident, valuable for insurance purposes.

Exchanging information with the other driver is a necessary step. Gather their full name, contact information, insurance company and policy number, driver’s license number, and vehicle details including make, model, and license plate. Provide your own information in return. Avoid discussing fault or apologizing at the scene, as statements can be misinterpreted or used during the claims process.

Documenting the accident scene thoroughly is advisable. Take photographs and videos of the vehicles involved, showing the damage from various angles, and include the surrounding area such as road conditions, traffic signs, and any relevant landmarks. This visual evidence can help establish the sequence of events and the extent of damage. If there are any witnesses, obtain their names and contact information, as their statements can provide additional perspectives on the incident.

The Claims Process

After gathering necessary information at the accident scene, the next step involves initiating the insurance claims process. You should notify your insurance company about the accident as soon as reasonably possible. Prompt reporting helps facilitate the process and allows your insurer to begin their investigation without undue delay. Many insurers offer multiple ways to report a claim, including phone calls, online portals, or mobile applications.

Once you report the accident, your insurance company will assign an insurance adjuster to your case. The adjuster’s role involves investigating the circumstances of the collision to determine liability and assess the extent of damages. This investigation may include reviewing the police report, examining photographs and videos of the scene, and interviewing involved parties and witnesses. The adjuster will also review your policy to confirm coverage applicability and limits.

Insurance companies determine fault by analyzing evidence, considering factors like traffic laws and driver actions leading up to the collision. In some cases, fault may be assigned partially to multiple parties, especially in states with comparative negligence laws. Following the fault determination, the adjuster will arrange for damage assessment of both your vehicle (if you have collision coverage) and the other party’s vehicle. This involves obtaining repair estimates from approved body shops or conducting an inspection.

Once damages are assessed and fault is determined, the insurer will work towards a settlement. For the other party’s damages and injuries, your liability coverage will provide payment up to your policy limits. If your vehicle is damaged and you have collision coverage, your insurer will cover the repair costs, minus your deductible, or pay out the actual cash value if your car is deemed a total loss. The claims process concludes once all covered damages and injuries have been resolved and payments issued.

Impact on Your Insurance Policy

Being found at fault for hitting another car can have several financial and policy-related consequences for your auto insurance. A primary impact is an increase in your insurance premiums. Insurers view at-fault accidents as an indicator of increased risk, leading to higher rates upon policy renewal. The amount of this increase can vary significantly, often ranging from 44% to 49% or more on average for full coverage, depending on factors such as the severity of the accident, your driving history, and your specific insurance provider.

This premium increase, sometimes referred to as an “at-fault accident surcharge,” remains on your record and affects your rates for a period of three to five years. The exact duration can depend on your state’s regulations and the insurer’s policies. If you incur multiple at-fault accidents within a short timeframe, the impact on your premiums can be even more pronounced and last longer.

An at-fault accident can also influence your policy renewal options. While most insurers will renew a policy after a single at-fault accident, repeated incidents or severe accidents could lead to non-renewal by your current provider, requiring you to seek coverage from a different company. Your driving record, which insurers review, will reflect the at-fault accident, potentially affecting not only your current policy but also quotes from new insurers.

Some insurance companies offer “accident forgiveness” programs, which can mitigate or prevent a premium increase after your first at-fault accident. These programs are not universally available and have eligibility requirements, such as a period of accident-free driving. While accident forgiveness can help avoid an immediate rate hike, it applies only once per policy.