College Kids, Car Collisions and Costly Insurance

by Susan

in Guides

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The summer is ending which means college will soon be starting. If your child is taking their vehicle with them to school, there is a strong possibility that they will get into a car accident sometime throughout their 4-year college career—after all, accidents are more likely to happen when the territory/city is unfamiliar, when in the car with a bunch of friends, or when in a rush to get to get to class. So what will that mean if your child is on your policy and a car collision occurs? Will your insurance premium increase? And if so, how much? To find out, continue reading below.

How much Will it Increase?

Before anything is said, it’s impossible to determine the exact amount an insurance policy will increase in price because each situation is different. However, it is known that certain instances will guarantee an increase on your premium:

  • if your child already has a ticket (or is issued one at the scene)
  • if your child is at fault (caused the accident)
  • if your child has filed a large claim in the past (and was also at fault then)

Thus, those who have never had any prior accidents or tickets will pay the lowest premiums even if they caused the accident. But if your child’s at-fault accident requires a large claim, the premium will increase more than average (average being about 10 percent) and will stay on their record for about 3-5 years. Also, if your child received any sort of “good-driver’s” discount that will also be revoked.

*Note that if your child is at-fault because he or she was drinking and driving coming home from a party for example, your child’s insurance may be canceled indefinitely and will need to obtain costly high risk insurance with another company.

What if it’s just a small accident?

If your child is just involved in a minor accident (such as a fender bender) and your insurance company is only forced to pay out a small claim (like a few hundred dollars) your rates may not increase at all.  Even if they have a major accident your insurance rate may still remain the same—but only if a ticket was not issued and only if your insurance company did not have to pay a claim. If your child gets involved in a accident, he or she is not-at-fault, but chooses to not make a claim for example, then naturally your insurance won’t know of the accident and your rates will stay the same.

When will rates increase?

If your child is at-fault, know that your insurance company cannot increase your rates right away. It can only be done so when the next renewal period begins and only then. So you might not see an immediate change if it’s mid-term. If you are worried about the price being way out of your budget however, then you can shop around for a new insurance company in the meantime. But if you wish to keep your child on your policy, their record will contain the newest accident and the new insurance company will adjust their rate accordingly.

This is a guest post by Susan Wells. Susan is from insurance quote guide, she writes on topics including health/car/life insurance, mortgage, real estate.

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