Effective 9/28/2010 for new car insurance policies and 11/27/2010 for renewal car insurance policies, the accident surcharge threshold will be increased from $1,000 to $2,000. What does this mean? If you were involved in an at-fault accident, the damages were between $1,000 and $2,000 and you are currently being surcharged, you could see a reduction in premium next time your policy renews.
Currently, if you are involved in an accident and you are at fault AND the amount of damage is greater than $1,000, your car insurance premium will be surcharged approximately 20%. For example if you were paying $500 a year on car insurance, your premium would increase to $600 when your policy renewed. This lasts for 39 months (3 years, 3 months).
With this new change, if the damages were less than $2,000, you would not be surcharged. This is a good thing for insureds. However, insurance companies are currently working out the details with the insurance department on how exactly to implement these changes so don’t expect anything too soon.
Submitted by: Mark W. Fingar, Certified Insurance Counselor
Vice President, Fingar Insurance