How Much Do Car Insurance Rates Go Up After An Accident? – Forbes Advisor

November 7, 2022

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A car accident may only last a few minutes, but the financial consequences can stay with you for years. if you have a good driving record and cause an accident, be prepared: the national average rate increase is 45% after a property damage accident and 47% for causing an accident resulting in injury, according to an analysis from forbes advisor.

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how does a car accident affect insurance?

The auto liability insurance portion of your policy covers property damage or injury you cause to someone else. When a claim is filed against your liability insurance, this could result in a “surcharge,” which is the actual rate increase after an attributable car accident.

Reading: How much your insurance increase after accident

The surcharge will start when you renew your policy (an insurance company cannot charge you a surcharge in the middle of the policy period). You can change insurance companies, but the new one will review your claims history and your driving record, so it will know about the incident and calculate your rate accordingly.

car insurance rate goes up when you cause an accident

Forbes Advisor analyzed the average rates of 10 major auto insurance companies for at-fault accidents resulting in property damage or injury.

state farm had the lowest average rate increase (21%) for at-fault property damage only accidents and geico had the highest (73%), on average.
usaa’s average rate increase for drivers who cause a property damage accident is 40%, but usaa still had the lowest total cost at $1,600 a year. Please note that USAA only sells policies to active and retired military and their immediate families.
allstate was the most expensive for drivers who caused a property damage accident, with an average annual rate of $3,103.

car insurance rate increases by company after a property damage accident

Auto insurance rates are slightly higher after an at-fault injury accident compared to a property damage accident, among the companies we analyzed. we find:

Average rate increases ranged from 22% (state farm) to 77% (geico) for drivers who caused an accident resulting in injury.
usaa had an average increase of 41%, but was still the cheapest overall rate at $1,613 per year. after usaa, state farm had the cheapest average rate.
allstate was again the most expensive, with an average rate of $3,133 per year.

car insurance rate increases by company after an injury accident

These comparisons show how essential it is to shop around for auto insurance prices if you’ve caused an accident. the increased penalty isn’t as important as the total premium you’ll pay, so keep an eye on that amount.

car insurance rate increases by state after an accident

The average car insurance rate increase for drivers who cause an accident varies by state. That’s because state laws governing auto insurance rates vary across the country.

our analysis found that:

Wyoming drivers (31% raise) get lowest average raise after property damage and injury accidents.
North Carolina drivers (79% increase) get the highest average increase for a property damage accident.
California drivers (97% increase) see the largest increase for causing an injury crash.

variations in accident severity and state laws

The overall severity of the car accident and the resulting cost of an insurance claim may affect the rate increase. a minor crash in a parking lot will generally not have the same impact as a serious accident. In certain states, your insurer cannot increase rates if the claim is less than a certain dollar amount.

for example, if you cause a car accident in massachusetts, you will not receive a surcharge for accident claims less than $1,000. And in New York, you can’t get a surcharge if there were no injuries and the total damage from the accident is less than $2,000. (But if you have two or more accidents like this, you may receive higher rates.)

can my car insurance rates go up if i didn’t cause the accident?

Usually, car insurance rates go up only when you cause a car accident that results in damage or injury to others. Here are some examples of car accidents that will not result in a rate increase:

Your car was hit in a hit and run accident.
Your car was legally parked when it was damaged.
Your car was rear-ended by another vehicle and you were not convicted of a moving traffic violation in connection with the accident.

See more examples of car accidents that won’t increase your insurance.

If you are involved in an accident, your auto insurance company may require proof that you were not at fault. Here are some examples of documents you can collect:

a police report on the accident
a statement from the other driver’s insurance company accepting fault
the other driver’s written statement, under penalty of perjury, proving fault
a legal document showing that you were reimbursed for the damage from the accident

Also, accident claims paid by comprehensive insurance generally do not result in a rate increase. these include collisions with animals and damage from falling or flying objects (such as gravel or road debris).

however, comprehensive claims are recorded in your claims history. Insurers generally consider drivers with a history of claims to be more likely to file future claims, which can translate to higher car insurance premiums.

how long will an accident affect my auto insurance rates?

How long an at-fault accident affects your auto insurance rates depends on your insurance company and state, but is typically three to five years. For example, states like New York and Texas allow insurance companies to charge surcharges only for accidents for the past three years, but states like Massachusetts allow surcharges for five years.

Some states and insurers will reduce the cost of the surcharge applied to an insurance policy for each year you drive without an incident (such as another at-fault accident or a moving traffic violation).

How can I lower my car insurance rates after an accident?

If you receive a surcharge due to a car accident, here are some ways to lower your auto insurance bill:

ask for discounts

It may seem inconvenient to ask your insurance company about possible price discounts after a car accident, but you may still qualify for discounted car insurance. For example, you could save a few dollars on your bill by going paperless, or you could get a lower rate if you no longer have to commute to work.

test your safe driving

The best way to recover from an at-fault accident is to practice safe driving. If you think you’re a very good driver, you might consider usage-based insurance. these programs track your driving actions and produce a score and tips to improve your driving. if you get a good score, you might get a discount.

find prices

If you’re not satisfied with your current insurer’s prices or service, you may want to compare auto insurance quotes. One of the best ways to save money on insurance is to shop around. While an accident surcharge will come with a new auto insurance company, they may still be able to beat your old company’s rates.