Car accidents are an incredibly destructive part of our modern mobile society. Even injury-free accidents may prove to be incredibly expensive due to repair expenses and more costly car insurance quotes. However, how does the car insurance rate change when the driver is ruled to be free of blame in the cause of the accident? Commonly called "no-fault accidents," these situations have some important implications on car insurance coverage for the customer's policy.
While the legislation varies from state to state, one fact remains constant: The negative effects of a car accident are greatly reduced by a no-fault ruling. Most insurance providers recognize that car accidents are often the result of random chance, rather than negligence. A mere instant can mean all the difference between a close call and damages exceeding thousands of dollars. As a result, companies will generally view each accident based on individual circumstances rather than rule based on a single formula. Let's say that a driver is rear-ended while sitting at a red light. In such a situation, the driver is clearly not at fault, and the penalty to the insurance quote should either be reduced or even all together nonexistent. However, imagine the same driver missing a green light and remaining stationary at the intersection, which results in a rear-end accident. While legally the fault lies with the other driver, the first may still see rates increase. Although the law cannot assign blame to the first driver, the insurance company may still rule that such a situation proves the first driver to be less competent and therefore, more costly to insure.
However, the situation is far more complicated than this: If a policyholder has been involved in previous accidents or incurred traffic violations, rates will probably increase, even though the judge ruled the driver to be not at fault. Numerous no-fault accidents could signal to the insurance company that a driver may be too cautious, and while still technically free of legal blame, is still perceived to be a threat to road safety. Again, this would result in increased rates. Statistically speaking, a driver often involved in numerous accidents will likely be involved in more in the years to come.
The good news is that car insurance is not a set cost. Many companies have accident forgiveness programs, where after a period of time, they remove past accidents from the rate equations. Even after numerous accidents, safe driving will still be rewarded. By driving sensibly and carefully, drivers can reduce even the steepest car insurance rates. No-fault accidents do reduce costs overall, but the safest course is always the wisest.