How Car Accident Impact Your Insurance


Nobody plans for a car accident to happen. Nevertheless, it can occur without warning and alter the lives of those involved. Thankfully we have insurance to take care of immediate questions of the cost, damages and future ramifications of all parties involved.
But how do car insurance companies assign fault and how does fault affect those involved in the crash? From fender-benders to life-threatening injuries, every company follows a system of scenarios and formulas to help assess fault.
Here are some key takeaways for how car accidents impact your insurance:

1. Always stay at the scene

If you are worried about your car insurance premiums going up after an accident, ensure there is proper process following an accident. If you leave the scene of an accident without notifying the police or reporting to your car insurance company, there is not much to be done. As a rule:always exchange full insurance and contact information with the other driver or drivers involved in the collision; and do not leave the scene of the accident before getting the green light by police.

Note: if others flee the scene, record their license plate number and call police immediately.
Click here to learn more about what to do in the event of a car accident.

2. Do not assume you are at fault

There are a variety of factors which determine who is at fault in acollision. Even if it seems obvious it’s you, let the police and insurance companies do their work. For example, if you are not paying attention and hit someone head-on, there is a chance they were not paying attention either. If the other driver becomes aggressive, confrontational or is pressuring you to take the blame, keep your distance and wait for police to arrive.

Note: admitting fault at the scene of the accident can influence the assignment of fault in an accident and can ultimately raise your premiums.

3. Fault is assigned by insurance

After a car accident occurs and is reported, your insurance company begins the task of assigning fault. They start by reading over the police report and applying the details of the accident to a variety of hypothetical scenarios. Fault can be assigned to one driver or split across all parties involved.

Cheat Sheet: You are almost always at fault if you:

  • are the sole driver involved
  • rear-end someone
  • side-swipe someone in your blind-spot

4. Drivers who are deemed ‘at fault’ may see their premiums rise

If your insurance provider deems you more than 25%at fault in an accident, you are most likely going to see your premiums rise. The rate increase typically takes affect at your next renewal date and usually remains raised for a few years, depending on the severity of the accident and your driving record. In general, accidents remain on your driving record for 6 to 10 years.

Note: since car insurance is assigned to the car itself, even if someone else crashes your car, your premiums are affected.

5. Not everyone involved in an at fault car accident is at fault

If you are riding as a passenger in a car that is found at fault in an accident, your insurance is not going to be affected Rather you are covered under the at fault driver’s insurance. The same can be said if you are hit by a car as a pedestrian.

6. Rates do not always go up

Minor accidents or fender-benders do not always mean increases to premiums. While the threshold of when a minor accident becomes more serious varies from insurance company to insurance company, if you have a clean driving record, you might get lucky.
Here are some more ways to help lower your auto insurance premiums.

7. Some car accidents can be forgiven

Depending on your insurance provider, additional coverage, called ‘accident forgiveness,’ can be made available to accident-free drivers who have been licensed for 6 or more years. In the event of a car accident, this type of coverage can prevent premiums from rising significantly or, depending on the severity of the accident, possibly prevent them from rising at all.

Note: although an accident can be forgiven, it is not forgotten. If another accident occurs, an increase in premiums may take the forgiven accident into account.
Speak to a PC® Insurance broker to see if you qualify for special add-ons or to see if you can be saving more money on your car insurance.

How to make a claim

Call 1-877-251-8656 to speak with a Claims Advisor.

Renewing your policy

Call 1-877-251-8652 for information regarding policy renewal.

Buying a new policy

Call 1-866-660-9035 for information on obtaining a quote.

Need help?

Take a look at the top 5 FAQs:

  • What are my choices in terms of auto coverage?

    What are my choices in terms of auto coverage?

    If you own or drive a vehicle in Canada, you must be insured. Different provinces have different requirements, but the four mandatory elements of auto insurance are:

    1. Liability - if you cause an accident and someone sues you
    2. Accident benefits - if you or someone in your vehicle is hurt in an accident
    3. Direct compensation – property damage (Ontario only)- if your vehicle gets damaged (and it's determined you're not at-fault or only partly at-fault)
    4. Uninsured motorist - if you're in an accident with an uninsured or hit-and-run driver
  • How do I reduce my insurance costs?

    How do I reduce my insurance costs?

    There are several things you can do to reduce your insurance premium costs:

    1. Work on your driving record
      Here's an easy, yet effective way to bring down your insurance costs: build a consistent accident and conviction-free track record with an insurance company.
    2. Choose your automobile wisely
      Do your research before you invest in a new car. Read consumer reports, and check with your insurance company to find out which cars tend to be targets for theft and vandalism. Remember, if you buy a car with a high theft rate, your premium will be higher.
    3. Adjust how you use your car
      By adjusting the way you use your vehicle, you can also bring down the cost of your insurance rates. If you live in a metropolitan area:
      • can you take the subway, train or bus to work?
      • has your job changed, or have you moved recently?
      • do you use your automobile to drive a short distance to work?
      • does your vehicle get used for low annual kilometers?
        If you answered yes to any of these questions, you may be entitled to lower insurance costs. Another consideration is whether you let others use your car. It is sometimes possible to exclude certain high-risk drivers from your policy so that good drivers are not penalized with a higher premium.
    4. Choose a higher deductible
      If you choose a higher deductible up front, your premiums will be lower.
    5. Review your coverage
      Take a closer look at your coverage to make sure you're not paying for things you don't need.
  • How can I earn PC Optimum points?

    How can I earn PC Optimum points?

    When you use your President's Choice Financial Mastercard to pay your PC auto insurance premium, you'll get 20 PC Optimum points per dollar of your premium.

  • Are other drivers insured to drive my car?

    Are other drivers insured to drive my car?

    Yes, as long as he/she has your permission to drive the vehicle, has a valid driver's licence and has not been specifically excluded from driving the vehicle. However, all licensed drivers in your household must be listed on your policy—regardless of how often they use your vehicle.

  • What is a deductible?

    What is a deductible?

    A deductible is the amount that you agree to pay towards the repair or replacement of your vehicle before your insurance pays the rest. You choose your deductible amount when you purchase your auto insurance. The higher your deductible, the lower your premium.

See all Auto Insurance FAQs


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