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Will Your Insurance Premiums Increase After An Accident?

January 27, 2021

Understanding whether or not your insurance premiums will increase after a vehicle accident is crucial. Insurance can be expensive, and an increase in the premiums can make the situation worse. Most people understand that their premiums will likely increase if they cause an accident. However, even those who are not at fault for a crash may see their premiums increase. Here, we want to discuss the auto insurance requirements in Kentucky as well as whether or not your premiums will go up in the aftermath of a crash.

Kentucky Is a Choice “No-Fault” Car Insurance State

There are 12 states across the country that operate under a “no-fault” insurance system. In these states, drivers will turn to their own insurance carriers for coverage, regardless of which party caused the incident. However, drivers may be able to step outside of the no-fault system in certain circumstances, particularly if a certain dollar amount threshold is met for medical expenses or if the injuries are particularly severe.

Kentucky, however, operates under a choice “no-fault” system. This means that drivers have the option of rejecting the no-fault portion of the insurance coverage and going with a traditional fault-based type of coverage. There are various benefits and drawbacks to opting out of the no-fault system.

In Kentucky, drivers are required to carry the following types of insurance:

  • Bodily Injury Liability: $25,000 per person and $50,000 per accident
  • Property Damage Liability: $10,000 per accident
  • Personal Injury Protection (PIP): $10,000 per accident*

The PIP coverage that you see listed above is the “no-fault” portion that can be rejected by the driver who purchases the policy.

Will Premiums Go Up After an Accident?

After a person has been involved in an accident, the insurance carrier will typically assess the person to be a higher risk of being in an accident. When an insurance carrier sees more risk, they charge more for their services. Auto insurance rates vary by each person, so it is difficult to pinpoint exactly which claims will make premiums go up. Studies have indicated that some of the main causes of increased premiums include large claims being made against a policy or multiple claims being made in a year.

It is almost certain that premiums will increase for a person that causes a crash. However, some companies have “accident forgiveness” programs, particularly for those who have been safe drivers for a certain amount of time. However, even car accidents that or not a person’s fault could cause premiums to go up. There are some states that prevent increasing premiums for drivers that did not cause a crash, but Kentucky is not one of those states.

One recent study showed that the average annual premium for a person with full coverage in Kentucky with a clean driving record was $1,850. However, the average annual premium for a driver in Kentucky with at least one at-fault accident was $2,340, which is a 26% increase.

What You Can Do if Your Premiums Go Up?

If you see that your premiums have gone up after an accident, your best plan is to begin to shop around for a new insurance provider. There are many car insurance companies out there, and they regularly compete against one another for customers. If you are unable to find an insurance carrier with cheaper premiums, you may want to consider adjusting your deductibles. However, keep in mind that if you increase your deductible, you will be on the hook for paying more out-of-pocket in the event you get into another accident.

If you or a loved one have been injured in an auto accident, contact a Lexington car accident attorney for legal help.