Here’s How Much Car Insurers Raise Rates After an Accident

Drivers talking to their auto insurance companies after a car accident — Dmitry Kalinovsky / Shutterstock.com

Originally published by Joshua Cox-Steib on Bankrate.com.

Car accidents cause harm to you and your vehicle, and they can also do significant damage to your car insurance premium. Drivers involved in at-fault bodily injury or pricey property damage incidents currently average an increase of 34 percent in their car insurance rates.

There are ways to reduce the impact of an accident on your car insurance. Some car insurance providers offer accident forgiveness programs that help minimize increases in your insurance premium following an accident, so it may still be possible to find cheap car insurance after an accident.

How much will my insurance go up after an accident?

It’s hard to predict exactly how much your car insurance rate will increase after an accident.

According to Laura Adams, a financial and insurance expert, “Having an accident or a moving violation on your driving record is a red flag to insurers, which typically causes your auto rate to increase significantly. How much it goes up depends on a variety of factors, including your insurer, the state where you live, having prior accidents or moving violations and your age. Younger drivers tend to pay the most after accidents because insurers view them as potentially risky customers.”

Here are average annual premiums before and after an accident:

Before an accident

For minimum coverage: $563
For full coverage: $1,738

After an accident

For minimum coverage: $803
For full coverage: $2,299

Difference

For minimum coverage: $240
For full coverage: $561

Some states might increase far more than the average, however.

The more damage you do in your accident, the more you can expect to see your premiums increase. If you have a history of accidents, you can expect an even steeper rate hike because you will look like a risky driver.

Comprehensive coverage steps in when damage befalls your car that isn’t related to a collision. You might file a comprehensive claim because your car was stolen or vandalized or because a tree limb fell on it, for example

While these claims can increase your premium slightly, it’s still worth filing with your insurer to get the coverage you need to restore your car to its pre-incident glory.

How much will my rate go up based on my insurance company?

While nearly every auto insurance company will raise your rates after an accident, the amount can vary noticeably between companies. The range of rate increase can be as big as between $200 and $900, depending on the company.

Below are 11 of the top auto insurance companies with their average annual premiums for full coverage shown both before and after an auto accident:

Allstate

Before: $1,920
After: $2,366

American Family

Before: $1,827
After: $2,023

AAA

Before: $2,007
After: $2,883

Geico

Before: $1,325
After: $1,925

Erie Insurance

Before: $1,207
After: $1,428

Farmers Insurance

Before: $1,912
After: $2,841

Nationwide

Before: $1,475
After: $2,258

Progressive

Before: $1,419
After: $2,353

State Farm

Before: $1,422
After: $1,773

Travelers

Before: $1,428
After: $1,962

USAA

Before: $1,252
After: $1,754

Why do insurance rates go up after an accident?

Insurance providers don’t raise rates to punish you. Instead, insurers adjust your rates after an accident to reflect the new data you gave them by getting into a collision. Now they know you drive in a way that you may cause an accident, they perceive you to be a riskier driver — and they have your accident to back that perception.

“Having an accident or a moving violation on your driving record is a red flag to insurers, which typically causes your auto rate to increase significantly,” says Adams.

If you’re riskier, providers pass that risk on to you in the form of higher premiums. This increase isn’t permanent, however. Most rate increases will fall off after a few years.

However, you might be able to avoid a huge rate increase by switching providers.

Adams says, “It might also be an excellent time to shop for a new auto policy because every insurer factors rates after an accident differently.”

There are both pros and cons to switching insurance providers, so make sure you weigh both sides before you do it.

Accident forgiveness programs

If the vehicle accident wasn’t your fault, and in some cases, even if it was, you may qualify for accident forgiveness if you were enrolled in the program with your insurer.

Accident forgiveness occurs when your insurance provider waives the surcharges incurred by the first at-fault accident of an eligible driver on your policy.

The program is commonly extended for free to long-time members with good driving records. Drivers new to the insurance company or with less-than-stellar driving records may be able to add the service for an additional monthly fee.

The following companies extend some form of accident forgiveness program to enrolled and eligible drivers:

Note: State Farm accident forgiveness is only extended to accident-free drivers who have been with the company for at least nine years

How long does an accident stay on your record?

On average, car accidents stay on your driving record for 3-5 years. However, the exact length of time depends on your state and the severity of the incident.

For example, in New York State, an accident or traffic violation will stay on your record until the end of the year when the incident occurred, plus three years after. In Oregon, an accident or violation will stay on your record for five years.

If you’re involved in a DUI or reckless driving crash, expect the incident to stay on your record for up to 10 years. You can check your state’s DMV website for information about driving record requirements where you live.

Lowering your car insurance rates after an accident

The bigger question other than how much your car insurance will rise after an accident is how you get the lowest possible premium now that your accident is behind you.

Even if you don’t qualify for accident forgiveness from your car insurance provider, there are still ways you can lower your insurance rate after a surcharge is implemented.

“If your car insurance rates go up after getting into an accident, speak to your insurer about potential ways to offset it,” says Adams. “You might qualify for discounts such as driving fewer miles, being a good student or having one in your household, and working in certain service-related occupations (such as teaching, healthcare, or the military).”

Here are some ways to lower your car insurance rate after an accident:

Improve your credit: Your credit rating plays a role in determining your car insurance rate in some states. Stay within your spending budget, pay debts and address any discrepancies on your credit report to better your credit score.
Increase your deductible: The higher your deductible, the lower your premium. Before raising your deductible, know you can cover more out of pocket expenses before your insurance pays.
Look for discounts: Most car insurance companies offer a variety of discounts, including good-student discounts and multi-policy discounts. Many also offer safe driving discounts that leverage technology. Examples include Progressive Snapshot, State Farm Drive Safe and Save, Allstate Drivewise® and Nationwide SmartRide.
Lower your coverage: If you absolutely need to lower your insurance premium, you can consider cutting down your coverages. Most states require a certain level of liability insurance to operate a vehicle, but you can cut out or lower your comprehensive or collision coverage if necessary.
Shop around: It’s always a great idea to shop around and find the best prices currently being offered from company to company. You may also find that some companies offer different discounts and coverage options than others.
Consider a different car: It costs more to insure more-expensive vehicles. If you need to cut down the cost of your coverage, consider getting one of these cheap-to-insure options instead.

By using one or more of these strategies, you can help reduce the sting of higher rates after an accident.

Frequently asked questions

Should I file a claim with my insurance company if my rate will increase?

If the costs to repair your damaged vehicle are at or just below the amount of your deductible, it’s smarter to forego filing an insurance claim. Just be aware of your specific insurance provider’s procedures on reporting an incident.

Which car insurance companies have accident forgiveness?

Many car insurance providers offer some kind of accident forgiveness to enrolled drivers, including Allstate, Progressive, USAA, Nationwide, Geico and The Hartford.

When does car insurance go down after an accident?

An accident may negatively affect your car insurance premium for three to five years after the date of the incident.

Will an insurance rate increase affect my credit score?

No. While being involved in a car accident does not negatively impact your credit rating, a low credit score can lead to higher premiums.

Bottom line

An accident is never good for your car insurance policy, but that doesn’t mean you’ll always have higher rates. Rate increases vary depending on where you live and the type of accident you caused.

You also have the ability to lower your premium by choosing a safe car to drive, improving your credit rating, adjusting your policy and shopping for coverage for the best deal. If you use these techniques and avoid another accident, you can help keep your car insurance rates from dramatically increasing.

Methodology

Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a cleaning driving record, good credit and the following full coverage limits:

$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2018 Honda Accord, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.

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