How Much Does Car Insurance Increase After an Accident?

Roughly 6 million police-reported motor-vehicle crashes occur in the U.S. every year, according to the National Highway Traffic Safety Administration. That makes having the right auto insurance coverage more important than ever. In the event that you’re involved in an accident, your coverage will kick in, and your insurance company can help pay for damages and medical bills. In most cases, however, auto accidents cause your insurance rates to go up, but it doesn’t happen automatically; in fact, and you may be able to avoid an increase even after you’ve had an auto accident.

When your rates will stay the same

Best case scenario, your rates will not increase just because of an accident. If you have a history of safe driving and have not filed any prior claims, minor accidents or fender benders may not negatively affect your rates.

Your rates also may not be affected if you are not at fault for the accident. This is particularly the case for insurers that offer accident forgiveness, which rewards drivers for safe driving and a lack of filed claims.

When your rates will increase

If the accident was your fault, someone was injured, or it was a major collision that caused major damage, you could see a dramatic insurance increases—perhaps even doubling in some cases.

Unfortunately, you may also see an increase even if you’re not deemed at fault for an accident. If your insurance company pays to cover your claim, your rates could still increase. The good news is that they typically won’t increase as much as they would have if you had caused the accident.

Why do insurance rates go up after an accident?

Statistics show that drivers who have been involved in an accident are more likely to be involved in another traffic violation. If the insurance company has to pay out for damages, medical bills, or legal costs, they may raise your rates to recover those expenses and protect themselves from future liabilities. The severity of the accident also matters. Not surprisingly, larger claims, such as those involving injuries or significant property damage, are more likely to result in higher premium increases compared with smaller accidents or fender benders.

How much does car insurance go up after an accident?

Because companies and situations differ significantly, how much your specific rate will go up after an accident also may differ dramatically.

Depending on the coverage you have and how much your rate was prior to the accident—as well as the severity of the claim—you could see an increase as low as $10 per month or as high as $800 or more per month. Your annual premium could increase a few hundred to several thousand dollars.

Also note that young drivers may see the highest increase after an accident since insurance companies typically view them as a higher risk group to insure.

Can you prevent your insurance rates from going up after an accident?

Ask your insurance company if it has an accident forgiveness program. If you’re eligible and enrolled, you may be able to get the surcharge waived. For example, most programs allow you to waive the first at-fault accident loss from your policy, or you may be able to waive one loss within a set timeframe (such as every three to five years).

Most of these programs are offered as endorsements that can be added to your existing car insurance policy at an additional cost, so talk to your insurance agent about whether this coverage may be beneficial for you.

Note that program guidelines are different for every insurance company, and availability varies by state. There may also be limitations for new drivers or new customers.

How does your driving record affect insurance rates?

When insurance companies determine your rates, one of the major factors they look at is your driving record. A poor driving history, filing multiple claims, or being involved in multiple accidents means you represent a higher risk for insurance companies, so your rates will likely increase as a result.

Once you file a claim, your rate will be affected when your insurance policy comes up for renewal, which happens once per year. But depending on the severity of the accident or violation, insurers can choose to raise your premiums mid-year, and you will see the increase on your next statement or bill.

If you are in an auto accident, talk to your insurance agent to learn if there are ways you can lower your premium. For example, there could be an additional discount you can qualify for. Now may also be a good time to go insurance shopping. Quote different insurers, comparing apples to apples to understand the different coverages and whether there are cheaper options out there.

Does your car insurance go down with one year of no claims?

While uncommon, it is possible to see smaller rate decreases if you’ve had one year of no claims with your insurance company.

Most at-fault accidents will not fall off your insurance record for three to five years, so it could take that long before you see any rate decrease. Keep in mind that this timeline depends on the type of accident, your insurance company, and your state’s laws. For example, while some states allow companies to consider only three years of driving history, others allow companies to consider up to 10 years, meaning accidents or other serious violations can impact your rate for much longer.

How long accidents stay on your driving record also depends on other factors called “insurance rating factors.” For example, if your policy has a no-claims discount, your rate may decrease by 10-15 percent after one year of no claims.

Why did your car insurance go up when nothing changed on your driving record?

Even if everything about you and your driving record stays the same, you may notice your car insurance rates increasing. This is because there are a variety of factors out of your control that also impact your car insurance, including:

• inflation,
• higher car repair and replacement costs, and
• an increase in auto claims in your area, including those for theft, accidents, or weather-related claims.

Additionally, one factor that’s out of your control and that automatically changes each year is your age. Your rate could increase around the same time you reach your early- to mid-70s as you’re viewed as a “riskier” driver at this time.

The amount that your insurance could increase due to these outside factors depends on your insurance company.

Is it bad if your insurance goes up?

It’s normal for your car insurance rates to increase over time based on factors both in and out of your control.

If the factors are within your control, such as you received a traffic violation or got into an accident, your rates could increase more dramatically and make it more difficult for you to afford your premiums. Depending on the severity of the infraction, your insurance company may refuse to provide you with car insurance at all, and it can be challenging to get coverage from another company.

If your insurance has increased due to outside factors, it’s not necessarily a bad look for you. Of course, rising premiums are a good reason to consider comparing car insurance companies to find the one with the right coverage at the best rate.

How can you lower your car insurance rates after an accident?

Even if your rates do increase after an accident, there are some ways you can bring the cost back down.

• Ask your insurance agent or company about discounts you may be eligible for.
• Increase the deductible on your comprehensive and/or collision coverage since, in most cases, the higher your deductible, the lower your premium will be. Keep in mind, however, that if you increase your deductible, your out-of-pocket costs will be higher if you file another claim.
• Consider changing your coverage options, though note that you must maintain your state’s minimum required coverage levels. Also, if you have a loan or lease your vehicle, you’re likely required to keep full coverage.
• Improve your credit score by paying down debts and addressing any mistakes or discrepancies on your credit report.
• Compare quotes from different car insurance companies to ensure you’re getting the best rate for your current situation.

Keep in mind that even if the damage from an accident seems minor, it’s always best to report an accident. If anyone involved in the accident were to sue you down the road, failing to report the incident can make it harder for your insurance company to gather evidence and information to support you. It can also put your coverage in jeopardy. Be armed with all the information you need on the road, and talk to your insurance agent today about your policy.