Most insurance companies in Maine surcharge insurance rates after you’ve had an at-fault accident. That’s because people who’ve had one accident are statistically more likely to have another. So should you pay for auto damage after a small crash yourself, instead of making an insurance claim? Here are some things to consider before you decide.
Is My Auto Accident Considered “At-fault”?
In Maine, unless another party is 100% at fault you may share some fault in the crash. Some examples of 100% at fault could be:
- running a red light or stop sign;
- hitting you while your car was legally parked
- changing into your lane and sideswiping you.
“At fault” doesn’t have to mean 100% at fault. Even if the other party is mostly at fault for the crash, you are still partially responsible. If your insurance company pays to fix your vehicle, and isn’t reimbursed by another insurer, they may charge you for an “at fault accident”.
Is My Accident Damage Below the Insurance Company’s Threshold?
Some insurers don’t charge for minor at-fault accidents with no injuries. Common thresholds are $1,000 and $1,500 of total damage to all vehicles. If your damage is below that amount, they’ll simply pay your claim and not surcharge your future rates.
Do I Have Accident Forgiveness?
Several insurers allow you to avoid a surcharge for your first accident. Most charge extra for that option. Every insurer uses different rules and calls this coverage something different. It’s commonly known as “accident forgiveness”. Some insurers only forgive the accident if you have no violations in the last several years. Interested in accident forgiveness? Ask your agent to compare their offerings. There are no standard terms.
How Much Will My Insurance Increase After an Accident?
If your accident is:
- “at fault”
- above the company’s threshold
- and not subject to accident forgiveness
your rates will increase at your next auto policy renewal.
How much? That depends on:
- How much you’re already paying. Surcharges are usually a percentage of premium. So, they more you’re paying, the higher your surcharge would be.
- How many other accidents you’ve had. Most insurers charge a higher percentage for each accident within the 5 year experience period. If this is your second, it will cost more than the first did.
- How long the insurance company surcharges for accidents. Many surcharge for 3 or 5 years. Some charge more the first year and decrease the surcharge each year until it’s gone.
Based upon what we see, following an accident, your insurance rates can increase anywhere from 7% to 20%.
Decreased Transparency in Insurance Rates
Insurance companies used to provide rate manuals to their agents. The manuals showed accident surcharge factors and told us how they were applied. Most insurers no longer provide this information. To agents, or even to their underwriters. Rating has also become much more complex.
Insurance companies now calculate custom rates for each person, instead of grouping similar people. Your agent can no longer predict the exact effect an accident will have on your future insurance costs. Even the insurance company underwriters are in the dark. They can’t answer questions any better than agents can. It’s far from ideal.
We’re Here to Help
At Noyes Hall & Allen, we recommend that our clients buy accident forgiveness if they want maximum stability. This helps keep insurance costs predictable. Most good drivers appreciate that. For answers to your Maine auto insurance questions, contact a Noyes Hall & Allen Insurance agent in South Portland at 207-799-5541. We offer a choice of several insurance companies, so we can help you find the best fit. We’re independent and committed to you.