How Much Does Car Insurance Go Up after an Accident?

After a car accident your car insurance may increase, here’s what you need to know.

If you have recently been involved in an auto accident, you may wonder how your car insurance will be affected. You can usually expect an increase in your insurance rates, regardless of whether you were at fault. A car accident typically requires filing a claim and goes on your record. Car accident history is one factor insurance companies consider when calculating their rates.

Comparing car insurance rates from multiple providers and inquiring about discounts are important things to do after a car accident. Different car insurance companies offer different rates and assign varying levels of importance to prior accidents. We’ll review how an accident affects your car insurance rates and offer tips to help you save.

How Much Does a Car Accident Increase My Auto Insurance Rates?

If you file an insurance claim after a car accident, you can expect your rates to increase. The New York Department of Financial Services states that your auto insurance premium could increase by as much as 40% following a car accident.

Of course, how much you pay depends on many factors, including your age, vehicle, and location. Your previous rate also determines how much you can expect to pay after an auto accident.

What Happens If the Accident Wasn’t My Fault?

Many insured drivers are shocked to discover that auto rates still increase even when they aren’t at fault for an accident. A no-fault accident is any accident in which you suffer damages or injuries due to another driver’s actions. Some states have laws to prevent this, and insurers such as USAA advertise that they won’t increase rates for no-fault accidents.

In no-fault states, however, everyone makes their claim against their own insurance policy, regardless of the circumstances of the accident. In a no-fault state, the insurance company you choose covers your medical bills, whether or not you’re at fault for the accident.

In comparison, if you live in an at-fault state, the responsible person’s insurance company pays the medical bills. States that follow no-fault insurance laws are where you’re most likely to see a rise in rates after an accident that isn’t your fault.

You’re not alone in wondering if it’s right for an insurance company to increase rates following a no-fault accident. Unfortunately, while it may seem unfair, it’s neither illegal nor unethical. Insurance companies can bump your rates for many reasons, including having an accident, in almost all states. On average, a car accident stays on your record for three years.

Regardless, whenever you’re in an accident, it’s best to compare quotes from different companies, whether the accident was your fault or not.

How Long Will Increased Rates Last?

According to the Insurance Information Institute , on average, a rate increase after an accident that involves real damage can last up to three years. You may notice a higher car insurance premium for even longer, especially if you committed specific violations, including:

  • Driving under the influence.
  • Causing serious bodily injuries or death.
  • Driving recklessly.
  • Receiving an excessive number of violations within a specific timeframe, which varies by state.

The III reports that, in some cases, your auto insurance company may even refuse to renew your policy. Depending on the details of the accident, other insurance companies may also deny coverage.

Which Accidents Cause the Biggest Rate Spike?

It’s not surprising that bodily injury claims cause insurance premiums to spike the highest. The National Safety Council states that speeding accidents are one of the primary causes of traffic fatalities and injuries, also leading to expensive policy increases. Because of the expense these accident types incur, most states have laws requiring minimum bodily injury coverage.

At-fault accidents also typically lead to a higher insurance increase than not-at-fault accidents. Therefore, you should file a police report if you believe the other driver is responsible to avoid any question of who’s at fault.

It may be worth taking a high-valued accident to court if you believe you’re wrongly accused of being at fault. Accident victims in no-fault states may even have to pursue legal action to receive compensation for their injuries or property damage.

Tips for Finding the Cheapest Rates after an Accident

The least expensive carrier before your accident may not be the least expensive after an accident. You may have to do more research and price comparisons when shopping for an auto insurance policy after a car accident. Here are a few tips to help you find affordable insurance after filing an auto insurance claim.

Consider High-Risk Coverage

Unfortunately, if you have serious violations or multiple accidents on your record, it can be tricky to find insurance, so you may need to explore high-risk coverage. To secure this coverage, check out your state’s directory in the Automobile Insurance Plan Service Office or talk to your insurance agent.

Having more than one high-risk factor can make securing auto insurance more difficult. For example, a young teen driver with multiple at-fault car accidents and a DUI may have few insurance options. Many states have policies available for higher-risk drivers to ensure they meet the minimum insurance requirements.

Drive Safely

Driving safely can help avoid additional accidents or violations, which would lead to an even higher insurance premium. Safe driving includes defensive driving, avoiding distractions, and not drinking and driving. Many insurers offer safe-driver discounts, which is another incentive to drive safely. Check with your agent to see if you qualify for one of these discounts.

Some insurance companies also offer discounts for policyholders who complete driver safety courses. These defensive driving courses are typically self-paced and include topics such as the dangers of distracted driving, impaired driving laws, all-season driving, and available safety equipment. Upon completion, you’ll receive a certificate that you can submit to your insurance company.

Adjust Your Coverage

Adjusting your insurance coverage can also help make your rates more affordable. However, make sure you follow state laws regarding insurance coverage. Almost all U.S. states have a minimum level of coverage that all drivers must carry; you may prefer to have more than the lowest limit.

A full-coverage policy typically includes comprehensive and collision, which protects you from damages regardless of fault. A full-coverage policy also pays for damages not related to an accident, such as inclement weather or theft.

If you have an auto loan or lease, your lender may require you to carry full coverage. However, if you don’t have an auto loan and your vehicle isn’t worth as much as your full-coverage deductible, you may consider dropping it to receive a lower rate.

Change Your Deductible

Some insurance companies also allow you to adjust your deductible. A deductible is the price you pay out of pocket to access your benefits. For example, if you’re in a not-at-fault accident and your deductible is $1,000, you’ll have to pay that amount before the insurance company covers the rest. Lowering your deductible typically leads to a premium increase, whereas increasing your deductible can qualify you for cheaper rates.

Only Use Insurance When You Need It

You can almost always expect a premium increase after filing a claim. Still, the purpose of insurance is to protect you against financial disasters, so use it if you need it. Just don’t file claims for small things that you can afford to pay for out of pocket.

If you’re in a minor accident, there’s no damage to anyone else’s property, and you can afford to pay for the repairs without involving your insurance company, it can be smart to do so. This is especially true if the cost is less than or close to the amount of your deductible. There’s no reason to pay that amount and increase your premium when you can repair your car without affecting your rates.

Remember that some insurance companies may require you to make a claim for any damage or accident. Make sure you understand your state laws on when you’re required to file a police report, as well as insurance policy requirements for filing a claim. For some insurance carriers, you may not be required to make a claim, depending on the severity of the accident.

Take Advantage of Accident-Forgiveness Programs

In addition to safe-driver discounts, many insurance companies offer accident forgiveness. These programs are provided as loyalty rewards and help you to avoid a rate hike after an accident.

They are usually available to safe drivers with no history of accidents or violations. In some cases, if you go for years without a violation, you may even see a rate cut. The terms vary among companies.

Be careful when choosing insurance companies that offer these programs, however. You may find that, while they offer safe-driver discounts and accident forgiveness, adding these clauses to your policy will raise your initial rates.

Driving safely to avoid rate hikes and comparing average rates from multiple insurance companies is always best.

Ask About Insurance Discounts

Many insurance companies offer discounts to eligible drivers, which can help lower your rates even if you don’t have a clean driving record. A few discounts to consider include:

  • Good student: Some insurance companies offer discounts to straight-A students.
  • Safe vehicle: If you choose a safe vehicle equipped with anti-theft or hands-free driving features, you may receive a discount.
  • Good credit: You may receive a discount if you have a good credit score.
  • Multiple policies: Combining your homeowners, renters, or motorcycle insurance policies with your automotive insurance may earn you a multi-policy discount.
  • Multiple vehicles: Some insurance companies offer discounts if you have more than one vehicle on your policy.
  • Anti-theft equipment: Some insurance companies may also offer discounts if your vehicle is equipped with anti-theft devices. Certain anti-theft devices decrease the risk of your vehicle being stolen, which can lower your rates.

Price Shop Insurance Rates

Comparing prices from multiple insurance companies is one of the best ways to combat rate increases after an at-fault accident. As soon as you notice a price increase from an accident, it’s time to begin requesting quotes from other providers. Be sure to compare the cost of insurance and the included coverage.

How much does car insurance go up after an accident? That depends on many factors, including the claim’s value, the at-fault driver, and your driving history. It’s a good idea to compare quotes from different providers following an accident to ensure you still have the best auto insurance rates.

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *