8 tips to offset a premium increase after a car accident

Why does my premium increase after an accident?

The number of accidents on file is part of the data insurers look at when calculating the car insurance premium of each individual. Statistics show that the more accidents a person has had in the last five or six years, the more likely they will have accidents afterwards.

When shopping for new insurance or adding a new driver to your policy, insurers check the Fichier central des sinistres automobiles (automobile claims database or the “FCSA”). This shared database catalogues all car accidents and other damages in the last six years, regardless of whether a claim was filed. The more accidents a driver has, the more the premium will increase.

Your current insurer won't systematically check your FCSA file at each renewal. Since it maintains your accident history in its own files, your insurer already has the information needed to calculate your premium at renewal.

How can offset a premium increase after a car accident?

1. Play it safe with Claims Forgiveness coverage

Since it's better to be safe than sorry, many insurers offer optional coverage to avoid premium increases resulting from a potential accident. Of course, to benefit from this coverage, it must already be included in your car insurance policy at the time of the accident. Also, because your accidents will continue to appear on your FCSA record, your premium increase exemption will cease to apply if you change insurers.

This add-on isn’t free, but should cost less than the average premium increase you can expect after an accident. Be diligent, however, and get all the information before you purchase this add-on. Its scope can vary considerably from one insurer to another. For example, some insurers have strict conditions, such as a specific number of years. Others add exclusions or limits on the type or number of eligible accidents or drivers.

2. Notify your insurer about every accident you’re in, claim or no claim

Insurers that view your FCSA file have access to your current insurance company’s version of the accident report, including confirmation that you were never indemnified. This reduces and may even eliminate the impact of the accident on your premium.

3. Notify your insurer of any changes in the use of your car

• Your teenager bought a car and no longer uses yours as an occasional driver?
• Not planning be on the road as much or using your car for work?
• Do you store your car for the winter?

Don’t keep it to yourself, this information will be factored into your premium calculation.

4. Talk to your insurer to make sure you’ve got the right coverage

Together, you can go over your coverage to make sure it suits your needs and vehicle. Your insurer will advise you of possible changes while maintaining an adequate level of protection. Your advisor can also explain the consequences of each change. For instance:

• If your car has a low market value, you may want to explore the possibility of removing certain optional coverages, such as collision and upset (when at fault), or coverage for all perils other than collision or upset (fire, theft, vandalism, glass breakage, etc.).
• If less extensive coverage may suit your needs, you may choose to reduce your coverage for all perils other than collision or upset, such as removing glass breakage protection.
• If you are comfortable assuming a larger portion of the costs in the event of an accident, you might also consider increasing your deductibles.

5. Bundle your insurance under the same roof

You could save a considerable amount of money on the price of each of your car, home and recreational vehicle insurance policies by bundling them with the same insurer.

6. Install an anti-theft device on your car

Since it reduces the risk of your vehicle being stolen, most insurers offer a discount when you have an anti-theft system.

7. Check if you qualify for preferential rates with your insurer

Are you a member of an association, club or professional order? Ask your insurer has a partnership with your group; you might be eligible for an additional discount on your premium!

8. Choose a car model and accessories that are less expensive to insure

Buying a new car? Keep in mind that the price of car insurance is also influenced by the make and model of the car and its accessories. For instance, models that make the list of most frequently stolen vehicles are generally more expensive to insure, given the increased risk of claims they represent. Accessories that are expensive to replace or repair also hike up the price of insurance.