Perhaps the top misconception of most people is thinking that their insurance policy will be dropped if they make a claim. But the truth is:

One minor accident probably won’t cause your policy to be dropped.

“We’re able to renew policies for the vast majority of our customers,” Siemienas says. “It’s a very small percentage of people whom we would no longer offer coverage for based on the amount of claims filed.”

McCartin agrees. “Every situation is different, but it’s unlikely your coverage will end after your first at-fault fender-bender,” he says.

For the insurance companies he works with, McCartin says, a driver usually has to have two at-fault accidents over three years, with damage exceeding $1,000, to be at risk for losing coverage.

“That is for a preferred tier. If you were in a standard tier with slightly higher rates,” he says, you might have even more leniency.

The tier system is a way insurance companies evaluate the likelihood that a particular driver will get in an accident, based on the statistics of the tier group. Drivers would be placed in a certain tier based on factors like the number of accidents they’ve been in over the past three years, the type of cars they drive and their overall number of years of driving experience.

There are circumstances where even one claim could cause a loss of coverage. If alcohol is involved, the driver probably won’t have the policy renewed, says McCartin. In addition, having multiple traffic tickets could be a cause for nonrenewal, even after only one accident.

Auto Insurance Secret 6

Check into “diminished value.” Say your car has been in an accident, but repaired. Is it worth less than the exact same car that hasn’t been in an accident? It’s a hot topic, but some say yes. In 14 states, you’re allowed to file a claim with your insurance company for that lost value.

Low Cost Insurance Guru Tip: Thirty-six states and Washington, D.C., allow insurance companies to exclude payments for diminished value, so if you live in one of those states, you won’t get to claim the loss. But in Florida, Georgia, Hawaii, Kansas, Louisiana, Maine, Maryland, Massachusetts, North Carolina, South Dakota, Texas, Virginia, Washington and West Virginia, you have a chance of getting a diminished-value payment. If you weren’t at fault in the accident, you often can make a successful case against the insurance company of the driver who was at fault.