Impact of Minor Collisions on Auto Insurance Premiums: What You Need to Know
Has your car experienced a minor collision, often referred to as a fender bender or bump? Wondering if your insurance premium will rise because of it? This article is designed to provide a comprehensive understanding of how such incidents can affect your insurance rates and what you can do to minimize the impact.
The Importance of Reporting the Incident
One might assume that a fender bender where the car is still drivable and no one was injured isn’t a significant issue for an insurance claim. However, it is considered a collision claim and will be noted on your driving record. This not only affects your car insurance but can also contribute to a potential increase in your insurance premiums if you are involved in more collisions.
What You Should Do Next
The first step is to enquire with your insurer. It’s crucial to understand that auto insurers may raise your premium even if the claim was paid under a fixed premium policy for a year. This practice not only fosters unhealthy competition among insurers but may also erode the trust of prospective customers.
What Happens If I Bumped Another Car?
Will my insurance go up? Following a fender-bender, the likelihood of a rate increase is virtually certain if the incident is reported as:
A claim submitted to your company A motor vehicle traffic report or ticket written by a police officerNo Report Scenario
If the “bump” was very minor and you resolved payment directly with the other party, there would be no impact on your auto insurance rates, assuming there was no police report or claim made.
Report Scenario
On the other hand, an incident like the one you described is typically considered an at-fault accident. An at-fault accident usually results in a payout by the insurance company under Collision and Property Damage Liability coverage.
Following such an incident, the result is bound to be an increase in your insurance premium.
How Much Can My Insurance Go Up?
Almost every insurance company has its own unique rating program. Following a claim, the change in your rates could vary widely, from nothing (claim-free discounts) to a 30% or more increase in premium for your vehicle.
The only way to know is to ask your specific carrier for the impact on your rates following an at-fault accident. However, be prepared for a vague answer. Rating programs have become extremely sophisticated and involve many variables. It may be legitimately impossible for a customer service person to predict a claims impact accurately.
Cost of Repairing a "Bump"
It’s important to note that with today’s vehicle design, a minor collision can often be very costly to fix. The cost to replace a bumper cover, for instance, can range from $800 to $1400. If the damage involves a quarter panel or light assembly, the cost can be significantly more.
Free Advice
In all but the most minor cases, it is in your best interest to report the claim to your insurance company and let them handle the settlement with the other party. Allowing the insurance company to investigate the claim and negotiate a settlement protects your interests, especially if the other party claims to have been injured in the incident.
Best of luck!