How To Switch Auto Insurance After An At-Fault Accident

If you've been in a car accident and it was your fault, you might be wondering if you can switch to a new insurance company. The good news is that you can switch car insurance companies at any time, even if you have an open claim. However, there are a few things to keep in mind before making the switch. First, your rates may increase by up to $81 per month after an at-fault accident. Additionally, switching insurance companies may result in losing certain discounts and perks offered by your current insurer, such as accident forgiveness and loyalty discounts. It's also important to be honest about your accident history when getting a new insurance policy, as lying about it could be considered insurance fraud. Overall, while it is possible to switch insurance companies after an at-fault accident, it may not always be the best financial decision.

Switching auto insurance after an accident

You can switch auto insurance after an accident, even if you were at fault. However, there are a few things to consider before making the switch.

Firstly, you need to be aware that your rates may increase by up to $81 per month after an accident. This is because insurers often share information about claims and accidents, so switching insurance may not necessarily get you a lower rate. In addition, your current insurance company cannot raise your rates until the policy is up for renewal, so they may still be your cheapest option until then.

Secondly, if you discontinue your current insurance policy, you may be charged a cancellation fee, and you may lose certain discounts and perks, such as loyalty or bundling discounts, that you have accumulated with your current insurer.

Thirdly, it is important to remember that you will still need to work with your previous insurance provider to settle any open claims related to the recent accident, even if you have switched to a new provider. This means that you will have to deal with two insurance companies until the claim is settled.

Finally, when applying for a new insurance policy, you will need to disclose any recent accidents, as failure to do so constitutes insurance fraud, which can result in serious criminal penalties.

If you are considering switching auto insurance after an accident, it is recommended that you get quotes from at least three to five different companies before making a decision. You should also research the companies online to look out for any red flags and check for cancellation fees and refund policies.

In summary, while it is possible to switch auto insurance after an accident, there are several factors that you need to take into account before making the switch to ensure that it is in your best interest.

The financial cost of causing a collision

The brand and model of the vehicle can also impact repair costs. Premium marques such as Mercedes-Benz or BMW may have lower total ownership costs than mainstream brands like Ford or Vauxhall, but their repair costs tend to be much higher.

Beyond the repair bill, there are other significant financial implications. These can include:

• Loss of income: Time spent dealing with the aftermath of a collision can result in lost productivity and income.
• Loss of key personnel: If employees are injured in a collision, the business may suffer from their absence, especially if they are key personnel.
• Loss of business: A company may lose business due to reduced operational capacity or damaged reputation following a collision.
• Replacement vehicle costs: While company vehicles are off the road for repairs, the cost of hiring replacement vehicles can add up.
• Insurance premium increases: Insurance premiums often increase after a collision, even if you switch to a different insurance provider.

The financial impact of a collision can be felt not only by individuals but also by businesses and the wider community. The calculable costs of motor-vehicle crashes include wage and productivity losses, medical expenses, administrative expenses, motor-vehicle damage, and employers' uninsured costs. The comprehensive costs of crashes also take into account the value of lost quality of life, which can be significant, especially in the case of serious injuries.

Fault determination rules

You can switch car insurance providers at any time, even if you have been at fault for an accident. However, there are a few things to consider before making the switch. Firstly, discontinuing your current insurance policy may result in cancellation fees. Additionally, your rates may increase regardless of which company insures your vehicle as insurers often share information about claims and accidents.

Now, here's an overview of the Fault Determination Rules:

The Fault Determination Rules, commonly known as the Fault Rules or FDR, are regulations enacted under the Ontario Insurance Act to establish driver responsibility after car accidents. These rules assign a fault rating of 0%, 25%, 50%, 75%, or 100%. If a driver is from Ontario, the portion not at fault is covered by the mandatory Direct Compensation insurance, while the at-fault portion is covered by the optional Collision insurance.

The Fault Rules apply to most accidents in Ontario, but there are rare exceptions where accident responsibility is determined by car accident case law. It's important to note that these rules are specific to Ontario, and other provinces or states may have similar but slightly different regulations.

One of the basic conditions of the Fault Rules is that insurance companies must use them when determining fault, and circumstances like weather or road conditions are not taken into account when assigning responsibility. Fault is determined solely based on the direct or indirect actions of the insured persons involved.

• Location of damage on a car is not considered evidence of what happened during the accident.
• Recreating an accident can be challenging, so the Fault Rules provide versions for both known and unknown accident details.
• If multiple rules apply to an insured person, the rule that assigns the least fault is used. However, if each insured driver is both 0% and 100% at fault under different rules, then each driver is deemed to be 50% at fault.
• If no Fault Rule applies to an incident, the insured driver is judged according to the ordinary rules of the road (case law).
• If there is insufficient information to determine fault, the insured driver is also judged according to case law.

The Fault Rules cover various scenarios, including accidents involving automobiles travelling in the same direction and lane, adjacent lanes, opposite directions, intersections, parking lots, and other circumstances.

For example, in the case of automobiles travelling in the same direction and lane, if automobile "A" is struck from the rear by automobile "B", the driver of automobile "A" is not at fault, and the driver of automobile "B" is 100% at fault.

Another scenario covered by the Fault Rules is when automobile "A" collides with automobile "B", and both are travelling in opposite directions and adjacent lanes. If neither automobile changes lanes and both are on or over the centre line during the collision, each driver is deemed to be 50% at fault.

The Fault Determination Rules provide detailed guidelines for various accident scenarios, helping to establish fault and determine insurance liability.

Accident forgiveness

• Liberty Mutual: If you have been accident-free for five years with any company, Liberty Mutual will forgive your first accident and not raise your rates. This policy applies to all drivers in the household, but only forgives one claim per household, not per driver.
• Nationwide: Nationwide offers accident forgiveness at an added cost. They forgive your first at-fault accident and also provide a 10% safe driving discount if you remain accident-free for five years.
• GEICO: GEICO will forgive your first auto accident, regardless of who is at fault, if you are over 21 and have an accident-free driving history for five years. This coverage can be earned or purchased.
• Progressive: Progressive has a tiered loyalty program for accident forgiveness. To qualify, you must be insured with an accident-free driving record for a certain period. The tiers are based on how long you have been accident-free and how major the incident is.
• Allstate: To qualify for accident forgiveness with Allstate, you must purchase their Gold or Platinum coverage plan, known as the YourChoice Auto plan. With the gold plan, you need three years without an accident to be eligible, while the platinum plan offers immediate accident forgiveness.
• Erie Insurance: Erie offers two options for accident forgiveness. The first option is similar to other companies, forgiving the first accident after being a customer for three years. Their second feature, called Feature 15, forgives all at-fault accidents if you remain with Erie for 15 years.
• Travelers: Travelers offers accident forgiveness for a fee, forgiving one accident or minor violation every three years.

When considering accident forgiveness, it is important to weigh the costs and benefits. While it can provide peace of mind, it may cost more in the long run, especially if you have a clean driving record. Additionally, even with accident forgiveness, your good driver or claim-free discounts could be affected after an at-fault accident. It is recommended to shop around and compare rates and coverage options from different insurers to make an informed decision.

Insurance fraud

You can switch auto insurance providers at any time, even if you have a current open claim or were at fault in an accident. However, it's important to note that your auto insurance rates may increase by up to 32% after an accident, even if you were not at fault. If you do decide to switch providers, you will still need to work with your previous insurance company to settle any open claims related to the recent accident.

Now, onto insurance fraud. Insurance fraud is a deliberate deception perpetrated against or by an insurance company or agent for financial gain. It is a crime that victimizes every resident of a state, resulting in increased premiums and higher prices for goods and services. The cost of insurance fraud is challenging to estimate, but a 2022 study by The Coalition Against Insurance Fraud (CAIF) indicates that it can cost U.S. consumers $308.6 billion annually.

• "Padding" or inflating claims
• Misrepresenting facts on an insurance application
• Submitting claims for injuries or damage that never occurred
• Staging accidents
• Overbilling or billing for services not rendered in the healthcare sector
• Agent fraud, such as selling fake policies or keeping premiums for personal use
• Homeowner fraud, including exaggerated or fake claims of burglary or arson
• Auto accident fraud, such as padding claims or filing a claim for an accident that didn't occur
• Mortgage fraud, where borrowers make false statements to obtain loans
• Staged vehicle accidents, such as "swoop and squat" or "hit and run" schemes

To avoid becoming a victim of insurance fraud, it is essential to be an informed consumer, deal only with licensed agents and brokers, obtain a copy of your insurance policy, and pay only for the services you have received. If you suspect insurance fraud, you should report it to the relevant authorities, such as the Insurance Fraud Hotline or the Department of Financial Services.

Frequently asked questions