On average, your insurance premium will increase by about 34% after an accident. It could go as high as 80% in extreme cases.
As if recovering from an accident isn’t already unpleasant enough! If you get into an accident and you're at fault, there are still some strategies you can use to reduce its impact on your car insurance premium.
The best course of action is to shop around and look for a better rate. Every company calculates differently, and Jerry can help you locate an affordable car insurance rate—even after an accident.
If you want to find out how an accident could impact your car insurance, read on.
Does insurance go up after an accident?
Whether or not your insurance premium will increase depends on who's at fault. If you are not found at fault in the accident, your insurance carrier probably won't increase your car insurance.
Car insurance companies increase premiums to make up for the money they lose when you file a claim. So if you're found at fault in an accident, your insurance is going to have to payout. However, if you're not at fault and the other driver is, their insurance will most likely cover the damages and you can avoid higher rates.
Your insurance carrier will have an adjuster assess the situation to decide who's at fault. If it's not obvious, the issue may have to be settled in court.
How much will my insurance go up after an accident?
Your rate could go up by a few hundred dollars annually—or skyrocket by more than a thousand.
Some providers levy a simple surcharge, but you could also end up paying more by losing your good driver discount. The good news is that your rate won’t increase until you renew your policy.
Younger drivers can expect a bigger bump, since they’re already considered risky drivers. People with previous accidents on record can expect a hefty increase, too.
Very serious accidents, like a DUI, trigger higher penalties.
Every company has its own formula for calculating risk, but every state has its own guidelines, too. As a result, your premium after an accident could be higher than average if you live in a state that has a particularly hard stance on driving violations.
For example, here are the five states with the biggest percent increase after a car accident.
|States ranked by average % increase||Average rate before accident||Average rate after accident||% increase from previous rate|
So, is it possible to estimate how much your specific premium will go up?
The rate increase depends on a variety of factors unique to you. Your policy, your driving history, and the specifics of the accident will be taken into account. More serious accidents mean a higher increase. If you already had a history of accidents on your record, your rate will go up even higher.
You might be tempted not to file after a small accident to prevent your premium from going up.
However, it’s definitely worth filing to get the coverage you need, especially for damages that exceed your deductible.
How much will my rate go up based on my insurance company?
Every company is different, and the formulas aren’t available to the public. However, you will most likely be looking at an increase anywhere between $200 and $1,000 annually.
The calculation is based on the company’s own formula, your driving history, and industry standard data.
Many auto insurance companies use standards set by the Insurance Services Office (ISO). ISO standards allow an increase of 20 to 40% of the base rate after an accident claim is filed. The base rate is the average rate charged in the state before discounts and other adjustments, plus the insurance company's fee for processing your claim.
Why do insurance rates go up after accidents?
Accidents signify that you are a "risky driver" to insurance companies. Meaning, if you’ve been in an accident, you’re at an increased risk of getting into another and your premiums will rise accordingly.
If you’re in a demographic that is already considered a risk to insure (you’re under 25, you already have an accident on record), then the company will increase your rate substantially if you are in an accident.
It can feel like a punishment when your insurance rate goes up after an accident. But this is not the case. It’s not a moral judgment! Raising your rate is purely economical.
Insurance companies are all about data. Your original rate was calculated based on the amount of risk you presented when you first bought the policy. Now that you have given them new data—by getting into an accident—they need to recalculate to account for the increased risk you present.
Rate hikes don’t last forever, though. They usually go down after a few years, once you’ve proved that you can maintain a safe driving record.
Another way to reduce your premium after an accident is to switch providers. Every company calculates differently. So while you won’t be able to hide your driving record, you may be able to get a better rate by shopping around. Jerry is free, and the average user saves $879 a year on car insurance. So you have nothing to lose — and potentially $879 to gain!
Big name companies aren’t always the cheapest. If you want to lower your car insurance premium, let Jerry shop around for you and find the cheapest rate.
Are accident forgiveness programs worth it?
You may be able to bypass a rate hike if you had an accident forgiveness policy. This is an optional add-on that allows you to be forgiven for the first at-fault accident. In other words, your provider will not raise rates on you the first time you mess up and cause an accident.
You have to pay for accident forgiveness policies, and they must be in place before the accident actually happens.
Accident forgiveness programs vary from company to company. Some give you accident forgiveness immediately, while others will only offer it once you've been an accident-free policyholder for as many as five years.
In some cases, even if you didn’t buy the policy, it may be extended to you pro bono if you have a long-standing record of safe driving. Make sure you ask the company about this to see if you qualify. There’s no harm in making a case for yourself, especially if you are a model customer with a great driving record.
Here are some companies that offer accident forgiveness programs to policyholders:
How long does an accident stay on your record?
Most accidents stay on your record for 3-5 years. A DUI or reckless driving incident can stay on your record for life.
The specifics depend on your state and how serious the accident was. For example, in Washington State, a traffic accident will stay on your record for five years. In New York, it’s three years. However, a DUI will stay on a New York driver’s record for 15 years.
Your driving record can be accessed by insurance companies, the DMV, and the police department.
The cheapest insurer before an accident may not be the cheapest afterward. While you can’t hide your record, you may be able to find a company that can beat your new rate with your old provider.
How to lower your car insurance rates after an accident
Once you’ve recovered from the accident, it’s time to look at your rates.
First, check into accident forgiveness. If you had this policy already, then your first accident is forgiven and you don’t have to worry about a rate increase! If you didn’t, try asking nicely and pointing to your pristine driving record.
If you’re still going to be slammed with a surcharge, there are still ways to reduce your rate. Check into discounts you might qualify for. You can get a reduced rate for being a good student, taking a defensive driving course, or installing a telematics device, among others.
Here are some ways you can try to lower your insurance payment after an accident:
Increase your deductible. This can make your premium go down—but be sure you can cover out-of-pocket expenses at a higher amount before you try this strategy.
Avoid filing new claims. If you can take care of a small problem yourself, do it.
Improve your credit. Better credit means lower insurance rates. Pay down your debts and stay on budget. Even 30 days is plenty of time to positively impact your credit score, and then you’ll be in a stronger position to negotiate a lower rate.
Qualify for discounts. You might qualify for bundling discounts, a paperless discount, a good student discount, a telematics safe driving discount, and more. Check with your agent to see if you qualify.
Drive a different car. More expensive vehicles tend to be more costly to insure. Consider switching to one of these top 10 cheapest cars to insure and you could save a ton.
Shop around. It’s always a good idea to scan the marketplace for better rates. With Jerry, you could save hundreds of dollars a year on your car insurance, even with an accident on record.
How to find savings with Jerry
If you’re looking for a new insurance company, Jerry can provide you with competitive quotes in under a minute. Swapping is just as effortless. Jerry takes care of all the paperwork, phone, calls, and even cancels your old policy on your behalf — oh, and it’s free!
Here’s how much real customers saved on their car insurance thanks to Jerry. On average, people with major and minor offenses were able to save about $930 every year on their premium by using Jerry.
|Violation||Pre-Jerry Price||Jerry Price|
The bottom line
Accidents suck, and your rates will probably go up no matter who was at fault. However, you can still be proactive.
Save money by conducting clever research, qualifying for discounts, and driving safely. Jerry can analyze the best policies across providers, plus handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to.
Frequently asked questions
Should I file a claim with my insurance company if my rate will go up?
Before you file, do a simple cost-benefit analysis. If the repair costs are at or below your deductible, it might be smarter to avoid filing a claim. Just check the fine print in your agreement to make sure you’re adhering to your provider’s policies.
When does car insurance go down after an accident?
A minor accident will typically affect your rates for 3-5 years, and then your premium will go down again.
Will an insurance rate increase affect my credit score?
Nope. A car accident is unrelated to your credit score. But do keep in mind that low credit scores can lead to higher premiums.
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