Auto Insurance Brockton MA
While trying to avoid a dog crossing the roadway, Silvia Young swerved and crashed into another car. Knowing that Brockton, Massachusetts, a city in Plymouth County that has a population of more than 95,000, is one of the most expensive cities to insure a car in, she’s worried that her auto insurance rates would spike up after filling for a liability claim along with her city of residence garaging factor.
Surcharge of Your Auto Insurance Policy
Most people compare insurance rates and company reputation without giving much thought about the accident surcharge, which is the premium increase should they cause property damages or bodily injuries while driving.
The surcharge rate varies greatly from company to company and by state, although the standard is 20-30 percent of your existing car insurance rate. Nonetheless, it is not uncommon to see surcharge as high as 40 percent or sometimes even reach more than 90 percent.
Aside from accidents and claims, the percentage increase is also influenced by other factors such as the type and value of vehicle, your garaging town (low accident rate vs high accident rate area), and the extent of your car insurance coverage.
While a huge surcharge may put a dent on your finances, your insurance may drop this off after keeping a clean record for 3-5 years. However, the determined length of time varies from state to state.
If you have a clean driving record for 3-5 years before getting into an accident, some insurers may simply shrug this off provided that you also have no moving violations for at least three years, and their payout does not exceed a certain amount (for instance, not more than $500).
Some insurance companies, meanwhile, have stricter accident forgiveness clause. For instance, it only applies to policyholders who have clean record.
Take note that while accident forgiveness is not a common industry practice, this can be purchased in many states.
Increase Your Deductible to Counteract Your Surcharge Rate
One way to lower your car insurance rates is to increase your deductible, which is the amount you pay out of pocket after your policy has paid out some of the damages. Nonetheless, this should never be taken lightly, especially if you are not sure that you can pay huge deductibles in the event that you cause an accident.
To put this into perspective, doubling the amount of your deductible (e.g., from $500 to $1000) may result in up to 20-30 percent reduction on your premium or a cheap automobile insurance.
Again, proceed with caution if you think about slashing your premium by half since it means that you take on more responsibility, aka higher deductibles, in the event of an accident you cause. In fact, most financial gurus would only recommend it if you have at least a six-month worth of emergency funds.
Other Traps You Should Avoid
In the event of an accident, whether or not it’s your fault, or no matter how trivial the damage might appear to you, always disclose this to your insurance company. Remember that failure to report this could result in denial of your policy should the other driver decides to sue weeks or even months after the incident.
Should your insurance decide to honor your policy nonetheless, there is another caveat when you fail to disclose the accident in a timely manner: Their inability to conduct their own investigation could leave you unprepared during litigation.