Large or small, car accidents are never desirable. You can find yourself abruptly forced to alter your daily routine due to having to locate a repair shop for your automobile, find transportation while your car is being repaired, and possibly even have to buy a new car.
Working with a reliable agency and insurance provider will help you quickly get back into the swing of things, but if you were found to be at fault for the accident, there is still one lingering issue that will come up at your renewal. The dreaded accident surcharge. You’ll be constantly being reminded of that situation going forward for years to come.
Accident surcharges have serious potential to put a dent in your budget with some ranging up to 40+% on your annual premium. While unavoidable, there are a few potential solutions you can explore with your agent that can help off-set a healthy chunk of that rate increase. Let’s dive into these options.
1. Explore Telematics Programs From Carriers.
Beginning with the approach that has the greatest potential for cost savings, Telematics programs require you to download an app to your smartphone or plug a device into your car in order to let the insurance provider track your driving patterns. Miles traveled, the time of day you are driving, and severe braking and acceleration are some examples of these patterns. Each carrier will want to run these analytics for a specific amount of time to gather accurate information about your driving habits, but once that time has passed, they will offer discounts for good driving behaviors. These discounts, which can potentially reach 30% depending on the carrier, will undoubtedly help offset the accident surcharge.
Telematics can be polarizing. Having an insurance company track your driving can be off-putting to some, but the fact is this gives the most accurate picture of your current driving habits and how much you should pay for insurance. Currently, insurance companies rate based on your driving history, and right now you have an accident history. If you are usually a safe driver but just had this one slip up there is no better way to prove that than to show them by letting them monitor how good of a driver you usually are.
2. Look at Raising Your Deductibles
You take on a little bit more risk when you increase your physical damage deductibles (for collision and comprehensive coverage). As a direct result, you will experience a reduction in your rate immediately after doing this.
While this may not provide the amount of savings the Telematics program has the potential to do, it is still definitive and can add up over time. My only advice with this is to make sure your emergency savings is sufficient enough to cover what your deductible is so that you don’t end up in a different financial conundrum of having a higher out-of-pocket loss.
3. Bundle Your Home & Auto (if you haven’t already.)
Having your home and auto insurance with the same carrier is greatly incentivized by insurance companies. If your portfolio is not already bundled together, now would be a good time to check it out. Not only will you receive discounts on your auto insurance that can help counteract the accident surcharge, but you will also receive sizable discounts on your home insurance as well which can help bring your total insurance costs down.
4. Explore Payment Option Discounts
While payment option discounts won’t completely eliminate your accident surcharge, they can undoubtedly be helpful. Since the bill will eventually arrive whether we like it or not, why not look into the discounts that are offered for paying the bill? Most carriers will offer discounts for paying in full or a 2-pay plan, automatic payments (EFT), and/ or paying online. Some of these discounts like the pay in full can amount to up to 10%, while others can be anywhere from 3-5%. Any option you choose will put more money in your pockets versus the carrier and that is our ultimate goal.
Even though receiving an accident surcharge on your auto insurance stinks, using any or all of the aforementioned remedies will greatly help reduce the burden. Exploring these opportunities can be made much simpler by working with an experienced independent agency that can guide you through this process. Please get in touch with any of our service professionals at The Staples Agency if you’d like to have a more in-depth discussion regarding assistance with an accident surcharge. Our committed team would be happy to guide you through your options and find personalized solutions.