Not only can car accidents cause harm to you and your vehicle, but they can also do significant damage to your car insurance premium. In fact, drivers involved in at-fault incidents currently average incurring a 31% increase in their car insurance rates after an accident.
Depending on the circumstances of the accident, there are ways to reduce the impact 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. Read on to learn more about how car insurance rates may be impacted if you’re involved in a vehicle incident and what to do to keep your premiums as low as possible.
How much does your car insurance go up after an accident?
Though at-fault incidents with bodily injury lead to the most significant insurance rate increases, other types of accident claims also affect your premium. Fortunately, comprehensive claims lead to a much lower rate hike. Car insurance claim types include:
- At-fault bodily injury accident
- At-fault property damage accident over $2,000+
- At-fault property damage accident under $2,000
- Comprehensive claim over $2,000+
- Comprehensive claim under $2,000
Review the charts below to see the differences in insurance rate increases depending on the type of accident and claim per state. Note that being involved in a second at-fault accident causes your car insurance premium to escalate drastically. On the other hand, even a second comprehensive claim increases your car insurance rate on average by less than 10%.
|Claim Type||Average Increase (%)||Average Increase ($)|
|At-fault bodily injury||32%||$459|
|At-fault property damage over $2,000+||31%||$450|
|At-fault property damage under $2,000||26%||$366|
|Comprehensive over $2,000+||3%||$39|
|Comprehensive under $2,000||3%||$39|
|2nd at-fault property damage over $2,000+||110%||$1,572|
|2nd comprehensive over $2,000+||8%||$121|
The average rate increase following an accident varies from state to state. For example, Minnesota drivers face the sharpest rate increase at 87%, while drivers in New York average a much smaller rate increase of 12%. The chart below breaks down car insurance averages from each state before and after an automobile incident.
|State||Average car insurance rate||Average insurance rate after an accident||Increase (%)||Increase ($)|
What if the accident isn’t my fault?
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. 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-on the service for an additional monthly fee.
The following companies extend some form of accident forgiveness program to enrolled and eligible drivers:
- The Hartford
- State Farm (Note: State Farm accident forgiveness is only extended to accident-free drivers who have been with the company for at least nine years)
Lowering your rates after a surcharge
Even if you don’t qualify for accident forgiveness from your car insurance provider, there are still a few ways you can lower your insurance rate after a surcharge is implemented.
- Improve Your Credit: In addition to your driving record, your credit rating also plays a role in determining your car insurance rate. Work on staying within your spending budget, pay down your outstanding debts and address any discrepancies on your credit report to better your credit score.
- Increase Your Deductible: When it comes to car insurance, the higher your deductible the lower your premium. However, before raising your deductible, keep in mind you’ll suffer more out of pocket expenses before your insurance kicks in if you’re involved in another accident.
- Discounts: Most car insurance companies offer a variety of discounts for their customers, including good student discounts for high school and college students who maintain good grades, multi-policy discounts for bundling insurance policies, and more.
- Lower Your Coverage: Though this option should probably be the last resort, 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 coverage if necessary.
- Shopping Around: With so many car insurance carriers on the market today, 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.
Frequently asked questions:
Should I even file a claim with my insurance company?
If the costs to repair your damaged vehicle or 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 accident forgiveness, Progressive accident forgiveness, USAA, Nationwide, Geico and The Hartford.
How long after an accident will my rate be higher?
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 an car accident does not negatively impact your credit rating, a low credit score can lead to higher premiums.