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The 7 Most Terrifying Car Insurance Words

A car accident or major traffic violation can leave you rattled, but even scarier can be the effect on your car insurance rates. Here are seven words that are sure to send you screaming.

1. Surcharge

If you think the embarrassment of causing a traffic accident can ruin your day, just wait until you see what happens to your premiums.

An at-fault accident can lead to a surcharge, which is a premium increase tacked on to your policy for a specific period of time.

Ask to see company surcharge schedules or insurance point plans when you shop for insurance. Amy Bach, executive director of the United Policyholders consumer group, warns that the language of such documents can be confusing. When in doubt, be sure to ask questions.

If you get a traffic ticket, you may be able to avoid a surcharge by appealing it, says Nina E. Kallen, an attorney who handles insurance issues in Roslindale, Maine. And if that doesn't work, you might try begging for mercy.

"You can always try whining," advises Erwin Adler, a Los Angeles attorney who handles insurance cases. "If you are a longtime policyholder, the underwriting manager may step in and do something" just to keep your business.

Here are details on how much rates go up after an accident.

2. SR-22

If your state department of motor vehicles decides that you are a high-risk driver, you may be required to have an SR-22 form, also called a certificate of financial responsibility, if you want to keep driving. You may be required to file an SR-22 if you cause an accident while driving without insurance or are convicted of a traffic-related offense such as a DUI. The form proves that you have the minimum required liability insurance.

Car insurance companies generally file the document with the state for customers who are required to prove they have insurance. Having an SR-22 certificate is a little bit like wearing a scarlet letter, however. No one is eager to do business with you.

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