Premium auto insurance: How to get your first crash free

The scariest part of a car accident can be the thought of what it will do to your car insurance bill. To put your mind at ease, almost all insurance companies allow drivers with spotless records to protect themselves from premium increases by purchasing premium protection. The cost is about $40 to $60 a year. In exchange, you get the promise that your rates won’t go up even if you have a crash for which you’re at fault.

Is premium protection worth the money? It depends on how accident-prone you are. Eve Patterson, a regional manager at the Insurance Bureau of Canada, says when you have an accident for which you’re at fault, your premiums typically go up at least 10% for five years. To get a more exact idea, you should call your insurance representative and ask how much your premium would go up if you had an at-fault accident. If the increase leaves you gasping, ask how much the premium protection would cost.

If you don’t have an at-fault accident for 10 years or more, premium protection insurance will probably be a money-losing proposition. But premium protection may be worth it if you simply can’t afford a big increase to your insurance bill and you do a lot of driving. Remember, though, that the protection only applies to your first at-fault accident—not subsequent ones—and if any criminal charges are laid as a result of your accident, all bets are off.