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After you have a car accident, you might see a hike in your car insurance rates. Your rates might even remain higher for a period of years, before possibly dropping again. Why do rates go up following accidents? How can avoiding accidents actually qualify you for more savings than your neighbors?

The fewer car accidents out there, the safer the local roads. It's often easy to see why insurers might reward those who remain accident-free.

Why Accidents Cause Rates to Rise

When you have a car wreck, the damage is likely to become costly. That cost is financial insecurity to you. Not only that, it's also often insecurity for your insurance company.

After you have a wreck, you or others will likely turn to your insurance policy to cover the resulting losses. Thus, while you might be able to protect your own pockets, you rely on the insurer to do so. When the insurance company has to pay for one of your losses, that equals a cost loss to them. No one wants to make a claim on their insurance policy. So, it stands to reason that a payout might have a detrimental effect on those involved.

Once you file a claim, your insurance company will likely assume you are a higher risk to insure in the future. Therefore, they might have no choice but to raise your policy rates. In essence, that guarantees that they will be able to help you on future claims.

Avoiding Increasing Rates

Of course, if your insurer raises your policy rates, that means more of a burden to you. Thus, you'll often face a little more strain on your checkbook. No one wants that. So, what can you do to avoid rate increases?

As a bottom line, avoiding wrecks and being a safer driver represent your first line of defense. You should follow all the rules of the road at all times. A commitment to not speeding, avoiding distractions and not making reckless maneuvers is often your best way to protect yourself. Keep in mind, however, if an accident was not your fault, you'll often not see your rates rise. Many insurers do not raise rates for those who were victims of another driver's mistakes.

At the same time, don't forget to ask your A-Z Express Insurance agent about claims-free discounts. If you have no claims on your policy, your agent will likely give you a percentage off your policy. You should therefore consider remaining accident-free key to savings in multiple ways. Even if you have a claim, you might re-qualify for the claims-free discount some time down the road. It's a goal to work towards.

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