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If you have insurance coverage, you do not want to get involved in a car accident. This is a sure way to increase your auto insurance rates and possibly even become dropped from the plan completely. Safe drivers that do not have speeding tickets or accidents will have the lowest possible rates from insurance companies. There are three main reasons why car accidents will make you lose coverage.

The insurance companies have a system that they use to calculate your driving ability. This is comparable to a driving credit score. Each time you are charged with a speeding ticket, accident, or non-moving violation you get points added to your driving history. The more points that you incur they higher it will cost to you obtain car insurance. You may be able to do things that can lower this, however once you get too many incidents it will be considered excessive and no company will offer insurance to you at all.

Most companies can compute the risk for each person that they decide to provide insurance coverage. The lower the risk the less cost it will be for them. The higher the risk the more money it will cost them for car repairs, medical claims, and property damage. If your driving records shows a pattern of poor driving they will decide to raise auto insurance rates and eventually refuse insurance coverage.

If you were in an accident through no fault of your own then most companies will not hold this event against you. If it is determined that the accident was your fault due to being under the influence of drugs or alcohol then this is an immediate case for lost of coverage. If you were not driving within the rules and regulations of the laws of your city, county or state can also be a factor contributing to loss of coverage. Reckless driving is one way that younger drivers have expensive insurance premiums.

If your vehicle provides coverage for you but often other people drive your vehicle that can provide a reason for insurance companies to reject you from having coverage. If the person receives a ticket for any reason inside your vehicle, this will raise a red flag to the insurance company. All events that happen are recorded onto the car’s records. They will use this to recalculate your insurance rate when it comes time for your insurance renewal.

Auto insurance rates are computed based upon points assigned to you for events in your history. The least number of points that you have will have a positive effect on your insurance coverage cost. Accidents are the most damaging to your driving record and can cause loss of coverage.