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Accident Surcharges: Paying More Premiums for Bad Driving

Written by Michele Wilmonen. Posted in Research Last Updated: 06/22/2011

Accident surcharges are added on to your policy so that your insurance company can make up the money it had to pay out for your claim and future claims.

Increasing numbers from accident surcharges

Every accident you have is assigned a point value to determine how much your accident surcharge will be for your insurance premium.

No one likes to pay for insurance, but it is something that everyone has to have if they want to drive. To keep your insurance premiums down so that paying them is less painful, stay away from premium surcharges, sometimes called accident surcharges.

How can you do this? Don’t cause an accident.

Minor accident

Insurance companies assigned a certain amount of points to each accident type and then apply your surcharges per how many points you have.

A minor accident has the least amount of points charged and will have the smallest impact to your premiums. A minor accident is classified as an accident that caused less than $2000 in damages. The amount of points and damage cost allowed to be classified as a minor accident depends on the insurance company that you are currently with and also the state you are living in.

Major Accident

Major accidents are the accidents where the damage cost is beyond what would classify as a minor accident. Again how it is classified will depend on your insurance company and state. These accidents carry a heavier point value and you will see a steeper increase in your insurance premiums if you have a major accident.

DUI/DWI Accident

If you are dumb enough to be driving behind the wheel while under the influence of drugs or alcohol, you deserve every single penny in surcharges that you will see if you cause a DUI/ DWI accident. You will not only see major accident surcharges,  you will also get the surcharge of the DUI/DWI traffic violation and also the SR-22 filing surcharge that you will now be required to have on your insurance policy. All of which will make you an honorary member of the high risk insurance pool.

Members of high risk insurance get to enjoy monthly premiums that are high enough to rival what you are making for a car payment all the way up to what you are paying a month in rent or for your mortgage.

Driver’s Safety Courses

Even if you have managed to rack up the points for accidents (and even traffic violations), there is hope for you and your insurance premium. If offered in your area, take a driver’s safety course. This course can help erase points from your driving record and help to decrease your insurance premium. In some cases, you will be given the chance to take a driver’s safety course after an accident or traffic violation in exchange for not having the points land on your driving record.

However, if your insurance company has to pay out damages for an accident that you have been in, regardless of taking this course, you will still see an accident surcharge. These courses are designed to get the points off of or prevent points from being put on your driving record only. In the end though, the lower points on your driving record will still help to decrease your insurance premium.

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Michele Wilmonen

Michele's first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she's earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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