Car accidents happen, even to drivers who aim to drive carefully. Being involved in an at-fault accident may be stressful, but having car insurance can help cover property damage and pay for medical costs, if needed, to give you some peace of mind.
After an at-fault accident, many drivers worry about the increase to their car insurance premium. However, the type of accident you were involved in, the amount paid out for the claim, location and many other factors will determine your new premium. It can help to understand the reasoning behind the premium increase and explore what options are available to you to make your new premium more affordable.
How much will my car 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 various 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.”
Based on Bankrate’s analysis of insurance rates from Quadrant Information Services, we found that, on average, premiums for full coverage insurance go up an estimated $637 after an accident. Here are average rates before and after an accident:
|Average annual premium for full coverage|
|Before an accident||$1,674|
|After an at-fault accident||$2,311|
Some states might increase far more than the average, however.
The more damage you do in your accident, the more you can generally 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 your car is damaged, but it is not 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 may still be worth filing with your insurer to get the coverage you need to restore your car to its pre-incident condition.
How much will my rate go up based on my car 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 increases can be as extensive as between about $165 and $850, depending on the company. Below are 11 of the top auto insurance companies by market share, with their average rates for full coverage shown both before and after an auto accident.
|Car insurance company||Average annual premium before an at-fault accident||Average annual premium after an at-fault accident|
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. By gaining a history of causing an accident, they perceive you to be a riskier driver who has a higher likelihood of filing claims.
If you’re riskier to insure, 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.
If you have seen your policy rates increase after an accident, getting quotes from other carriers could help you lower your premium. 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.” However, you should know that your new insurance carrier will also be able to see your claim and how much was paid out and will also charge your policy accordingly. But because every company charges different rates, you might find that a different company charges less even after factoring in your claim history. 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 you were enrolled in an accident forgiveness program prior to your accident, you might be eligible to have the claim surcharge waived. Although guidelines vary by provider and state availability, most accident forgiveness programs are designed to waive the first at-fault loss that occurs on your policy and will waive only one loss within a specified timeframe, like three or five years.
However, most accident forgiveness programs are optional endorsements that do add to the cost of your policy. If you have been with a company for a certain length of time, you may qualify for free, but most companies charge extra to participate and may have limitations for new drivers or new customers.
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 three to five 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 remain 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 Department of Motor Vehicle (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 do 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, but not all states allow the use of credit scores as a rating factor for insurance. 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, keep in mind that your out-of-pocket expenses will be higher in the event of a claim.
- 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.
- Shop around: It’s always a great idea to shop around and find the best prices currently being offered from different car insurance companies. It may be difficult to find a car insurance policy that offers the same coverage at the same price prior to an at-fault accident, but you may also discover that other insurance companies offer different discounts and coverage options.
- Update your coverage choices: If you absolutely need to lower your insurance premium, you could consider changing your coverage options. Although you should always review these changes with a licensed agent, lowering the amount of insurance you have could lower your premium. You will still need to maintain your state’s minimum required coverage levels, and if you have a loan or lease, you will need to keep full coverage on your vehicle, but you might be able to trim optional coverage selections.
- Consider a different car: The make and model of every vehicle is rated differently by insurance companies and it costs more to insure more expensive vehicles. This comes down to safety ratings, materials, cost of repair and many other factors. If you need to cut down the cost of your car insurance policy, consider getting one of these cheap-to-insure options instead.
By using one or more of these strategies, you can help lower 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?
The decision to file an insurance claim depends on several factors. You should be aware of your comprehensive or collision deductible and know which deductible will apply to your loss. For minor accidents, getting an estimate before filing a claim might be a good idea. Reviewing your potential claim situation with an agent could help you decide if filing a claim is appropriate.
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. However, keep in mind that the availability of accident forgiveness programs vary by state.
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 depending on the state you live in.
Bankrate utilizes Quadrant Information Services to analyze 2021 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 clean 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 coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base) and at-fault accident.