A primary factor impacting your auto insurance rates is whether you’ve had a recent accident. Unless you have accident forgiveness, your premiums will likely increase after you’re involved in a car accident, especially if you were at fault.
But how much does insurance increase after an accident? The simple answer is that you can expect a 30% to 70% hike.
Is there anything you can do to offset higher rates following an accident? Read on to find out.
Learn more: Car insurance rates are climbing. Here are 4 reasons why and 11 ways to save.
Insurance company Worth estimates the average car insurance premium is about $138 monthly.
From that rate, a 30% to 70% increase raises your insurance costs by about $41 to $97 per month. Whether your insurer opts for the lower or higher end of that range depends on several factors. Three important ones are who caused the accident, how severe it was, and the quality of your driving record before the crash.
Depending on where you live, any accident can prompt higher insurance premiums — no matter who is at fault. Even a comprehensive coverage claim for vandalism or a tree falling in your driveway can prompt a rate increase.
However, you are more likely to see larger rate changes after an accident you caused. Unfortunately, insurers are quick to punish driving mistakes. A small mistake that leads to property damage or personal injury flags you as a higher-risk driver, which leads to costlier premiums.
Accident severity and cost of the claim also influence how much your rates will rise. A small fender bender won’t affect rates as much as a total loss crash or drunk driving accident.
Learn more: What is the difference between DUI and DWI?
Insurers may be more tolerant of your first accident, especially if it’s minor. On the other hand, if you have a history of infractions and collisions, your rate increase could be more aggressive.
Insurers can keep rates elevated as long as the accident remains on your record. The exact timelines vary by state, but here are some guidelines:
1. Minor accidents may stay on your record for three years.
2. Major accidents may stay on your record for five years.
3. DUIs and hit-and-run accidents can remain on your record for 10 years or more.
Generally, you can expect to pay higher rates for three to five years after an accident, whether you were at fault or not.
No one wants to pay 70% higher car insurance premiums for the next three years, so what can you do about it? Your options depend on whether you want to stay with your current carrier or you’re willing to switch.
Car insurers use multiple factors to calculate your premiums. Cumulatively, these factors help the provider assess how much of a risk you are to insure and how likely you are to file a claim. Therefore, when a change to your driving record prompts a rate increase, you can try to offset it by addressing a different rate factor.
The information that commonly influences your rates alongside your driving record includes:
Of these, the easiest to change are your coverages, the type of car you drive, and whether you’ve taken a driver safety course.
Reducing your coverages or raising your deductibles will lower your rates, but there is a trade-off. You will have less financial protection if you have another accident.
You could trade your vehicle for a less expensive, less risky model. For example, if you drive a sports car, you could switch to an SUV equipped with safety features. Safer cars generally cost less to insure.
Lastly, you can ask your carrier if completing a driving course would earn you a discount. If yes, find out which courses are approved so you can sign up.
Learn more: How to get all the best car insurance discounts
If you are open to switching carriers, shop around for quotes. Every insurer uses a unique proprietary algorithm to set rates. You might find a provider that is more forgiving for the type of accident you had.
Learn more: How to switch car insurance companies
Accident forgiveness is a policy upgrade that can be free or paid, depending on the insurer. The upgrade can guarantee that a single at-fault accident doesn’t increase your premiums at renewal.
Learn more: Is accident forgiveness worth it?
GEICO and Progressive, for example, offer free accident forgiveness for certain customers. Free accident forgiveness is a loyalty perk and a reward for safe driving. Other insurance providers, such as Nationwide, offer optional accident forgiveness coverage for a fee.
If you pay for accident forgiveness, consider it budget protection. Your rates are a bit higher upfront, but this insulates you from a big increase later. Be sure you read and understand the rules describing what types of accidents can be forgiven.
The best way to avoid rate increases after an auto accident is to avoid accidents. Be diligent about practicing safe driving habits such as following speed limits, ignoring electronic devices while behind the wheel, and limiting distractions.
Over time, even without an accident, you may still be faced with paying higher rates, even for the same auto insurance policy. For this reason, it’s wise to evaluate your policy and coverage regularly and compare your options. You want to be certain you’re getting affordable car insurance — and only as much coverage as you need. If your current rates are consistently higher than others, it might be worth switching carriers.
Learn more: How much car insurance do I need?
Your car insurance rates can rise after an accident that wasn’t your fault. Your rates could rise 30% to 70%, with the exact increase dependent on your insurance provider and where you live.
Unless you have accident forgiveness protection, your car insurance rates will probably rise after you cause an accident. The increase usually ranges from 30% to 70%. Your rates may remain elevated for three years or more.
Ideally, notify your insurance company immediately after an accident. You may even want to call your provider from the accident scene, particularly if you need the vehicle towed to a repair shop.
An accident can affect your insurance rate for three to five years. Serious incidents like drunk driving accidents and hit-and-runs can keep your rates elevated for 10 years.
You should collect the other driver’s contact and insurance information, names and telephone numbers of witnesses, pictures of the scene and all vehicles, and names of any police officers who take a report.
Learn more: What to do after a car accident: Your step-by-step guide
This article was edited by Tim Manni
