Car accidents can cause injury to you and your vehicle as well as significant damage to your auto insurance premium. On average, drivers involved in an at-fault accident that results in bodily injury or property damage will see an increase in their car Insurance rates by 38%.
What will my car insurance cost after an accident?
It is difficult to predict how much your car insurance will rise after an accident. Laura Adams is an insurance and financial expert. “Having an accident on your driving record or moving violation on it is a red flag for insurers. This typically causes your auto rates to rise significantly.” It depends on many factors such as your insurance company, your state, prior accidents, moving violations, and your age. The insurance companies view younger drivers as risky customers and tend to pay more after an accident.
These are the average rates of an accident before and after it:
In some states, the average might be higher than the average.
Your premiums will rise the more you cause damage to your vehicle in an accident. You can expect a steeper rate increase if you are a high-risk driver who has a history of accident.
Comprehensive coverage covers your vehicle if it is damaged but not in a collision. Comprehensive coverage is available if your car has been vandalized, stolen, or damaged by a tree limb. These claims may increase your premium, but it is worth contacting your insurance company to ensure you have the coverage you need in order to restore your car back to pre-incident condition.
What percentage of my rate will go up depending on the car insurance company I have?
Although almost all auto insurance companies will increase your rates for an accident, the exact amount can differ between companies. Depending on which company you choose, the range of rate increases could be anywhere from $165 to $850. Here are the top 11 auto insurance companies based on market share. Below is a list of their average rates for full coverage, before and after an accident.
What causes insurance rates to rise after an accident?
Rates are not raised by insurance providers to punish you. Insurers adjust your rates to reflect the information they have received from you after an accident. They now know that you are a dangerous driver and that your actions could cause an accident.
Adams says that having an accident or moving violation on your driving record can be a red flag for insurers and cause your auto rate to rise significantly. Providers will charge you more for being riskier. However, this increase is not permanent. Most rate increases will end after a few decades.
If your rates have increased after an accident, you might be able to get quotes from other carriers. This could lower your premium. Adams states, “It may also be an ideal time to shop for an auto policy.” But, Adams also says that you need to know that your new insurer will be able see the details of your claim, including how much was paid, and will charge you accordingly. You might find that different companies charge different rates and penalize your claim less. There are pros and cons to switching between insurance providers so weigh both sides before making the decision.
Programs for accident forgiveness
You may be eligible for a waiver of the claim surcharge if you were enrolled in an accidental forgiveness program before your accident. While the guidelines for each provider may vary, most accident forgiveness programs will waive the first at fault loss on your policy. They also waive any loss that occurs within a specific time frame, such as three to five years.
Accident forgiveness programs can be optional endorsements and may increase the cost of your insurance. You may be eligible for free if you’ve been with the company for a certain amount of time. However, most companies charge an additional fee to participate.
These companies offer some type of accident forgiveness program for eligible and enrolled drivers:
Not all accident-free drivers are eligible for State Farm accident forgiveness. This is limited to those who have been employed by the company for at most nine years.
What length of time does an accident stay on your records?
Car accidents can stay on your driving record for up to three to five years. The exact time it takes depends on the severity of the accident and your state. An accident or traffic violation, such as in New York State will remain on your record for three years. An accident or violation in Oregon will stay on your record for five year.
You can expect to have the incident on your record for as long as 10 years if you are involved in a DUI/reckless driving accident. For information on driving record requirements in your area, visit the DMV website of your state.
After an accident, lower your car insurance rates
Other than the question of how much your car insurance will increase after an accident, the bigger question is how can you get the lowest premium now that you have dealt with your accident.
Even if your provider of car insurance doesn’t offer accident forgiveness, there are still ways to lower your insurance rates after a surcharge has been implemented.
Adams says, “If your car insurance premiums go up due to an accident, talk to your insurer about possible ways to offset it.” You might be eligible for discounts, such as driving less, having a student in your household or working in a service-related field (e.g., teaching, healthcare or military).
These are some of the ways you can lower your car insurance after an accident
- Credit rating is a factor in the cost of car insurance in certain states. To improve your credit score, you must stick to your budget and pay off any debts.
- Your deductible is the key to lowering your premium. Before increasing your deductible you should know that you can pay more out-of-pocket expenses before your insurance pays.
- Consider looking for discounts: Many car insurance companies offer discounts such as multi-policy discounts or student discounts. Many offer discounts for safe driving that leverage technology. You can find Progressive Snapshot and State Farm Drive Safe and Save.
- Compare prices: You can shop around to find the best deals from company to. It is possible that different companies offer different coverage options and discounts.
- You can update your coverage: If your premium is too high, you might consider changing your coverages. You should always discuss these changes with an agent. However, lowering your insurance policy could reduce your premium. While you must maintain minimum coverage in your state, if you have a loan, or lease, you can reduce optional coverages.
- You might consider a different vehicle: Insuring more expensive cars will cost more. These affordable-to-insure options are a good choice if you want to lower the cost for your coverage.
You can reduce the impact of higher accident rates by using any one of these strategies.
Questions frequently asked
Do I need to file a claim with my insurer if my rate is going up?
There are many factors that will influence your decision to file an insurance claim . Know your collision or comprehensive deductibles and which deductible will be applicable to your loss. A good idea is to get an estimate before you file a claim, even if there’s only minor damage. An agent can help you assess your claim situation and determine if a claim should be filed.
What car insurance companies offer accident forgiveness?
Many car insurance companies offer accident forgiveness for enrolled drivers. These include Allstate, Progressive and USAA.
What happens to your car insurance after an accident?
A car accident can have a negative impact on your insurance premium for up to three years from the date of the accident.
What will happen to my credit score if the insurance rate goes up?
While a car accident will not affect your credit rating, it can cause higher premiums.
Bottom line
Although an accident can be a problem for your car insurance policy it doesn’t mean that you will always pay higher rates. Rates can rise depending on where you live, the type of accident and how severe it was.
You can also lower your premium by selecting a safe vehicle, improving your credit rating and adjusting your policy. These techniques can prevent your car insurance rates dramatically from rising if you avoid an accident.
