How a car accident affects your car insurance | finder.com
How a car accident affects your car insurance

How a car accident affects your car insurance

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That fender bender could mean paying a higher premium.

When competing for your business, many car insurers advertise generous accident forgiveness policies. But after you choose a policy and end up in an accident, your company’s stance on rate hikes might not be so easy to understand.

After the dust settles and claims are paid, know what to expect and how to prevent an accident from ruining your driving record and insurance premiums.

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Why do insurance rates go up after an accident?

Regardless of fault, after an accident you could see your premium increase for reasons beyond the obvious:

  • You’re put in a higher risk pool. Insurers are in the risk business. After even one wreck, your insurer will likely reassess you as a riskier policyholder, raising your rates in turn.
  • You’re disqualified for a safe driver discount. If your clean driving record helped you save on your premium in the past, an accident could wipe out that defensive driver discount.
  • You’ve used up your accident forgiveness. If this perk erased the premium fallout from a previous accident, you aren’t protected from a rate increase this time around.

What if I have accident forgiveness?

If your insurance policy comes with accident forgiveness, you could be protected from rate hikes after your first at-fault accident.

However, this perk largely depends on the specific terms of your policy. For example, some companies offer accident forgiveness to drivers who have an otherwise clean driving record. If your accident is particularly bad or involves driving while under the influence of alcohol or drugs, it won’t necessarily safeguard you from being dropped by your provider.

What happens to my perk after an accident?

If you take advantage of accident forgiveness, you lose the ability to use this perk again for as many years as your provider requires. If your policy includes more than one driver, any driver who cashes in this perk renders it unavailable for everybody else on the policy.

Accident forgiveness doesn’t keep your accident from show up on your driving record. If you switch insurers, you could face higher premiums than if you had a clean driving record.

Can I ever get accident forgiveness back?

Yes, but how long you’ll need to wait depends on your insurer. You could be eligible for accident forgiveness again if you avoid accidents or speeding tickets for a specified time. Some insurers allow you to cut down that time by taking a safe driving course.

Contact your insurance company to learn what applies to your specific policy.

How much does insurance go up after an accident?

Many factors figure into how much your insurance premium might go up after an accident, including your driving history, the cause of your accident, the severity of the outcome and where you live.

For an at-fault accident involving bodily injury, your rates could increase by as little as 11% in Alaska or as much as 92% in California. On average, most states ding you in the 20% to 40% range for accidents you cause. A 30% increase could mean that your $200 monthly premium costs you an extra $60 a month or $720 a year.

Does the type of accident matter?

Yes, as does the severity of your accident. DUIs tend to result in the most severe premium spikes.

Crashes that result in injury or death are also among the top of the list for high insurance increases. Claims filed under comprehensive coverage, such as hitting a deer or getting bad gas in your car, might not move the needle at all.

Average insurance premium increases by accident type

The national average cost of car insurance is $1,410 a year. You might expect your insurance to increase by half for a standard car crash, leaving you to pay about $700 extra a year. That figure goes down for less serious crashes.

Accident typeNational average insurance rate increaseAverage additional premium cost
DUI87%+$1,227
Bodily injury claim49%+$691
Fender bender resulting in $2,000 or more in damages41%+$578
Comprehensive claim2%+$28

Compare car insurance providers

Name Product Roadside assistance New car protection Available states
Allstate
Included free
Yes, cars under 2 years old
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Liberty Mutual
Optional
Yes, cars under 1 year old & 15,000 miles
All 50 states
Car insurance through Liberty Mutual will give coverage options for almost any situation.
Root
Optional
No
AZ, AR, DE, IL, IN, IA, KY, LA, MD, MI, MS, MT, NM, ND, OH, OK, OR, PA, TX, UT
Root offers simple, affordable insurance that’s ideal for good drivers. Try the Root app for 2 weeks and see how much you could save. Available in 20 states.
Esurance
Optional
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.
Metromile
Optional
Yes, cars under 1 year old & 15,000 miles
CA, IL, NJ, OR, PA, VA, WA
Drive less than 30 miles a day? Save on the coverage you need with pay-per-mile insurance from Metromile. Get a low monthly rate then pay just a few cents per mile. Available in CA, IL, NJ, OR, PA, VA and WA.
USAA
Optional
No
All 50 states
USAA offers affordable car insurance with highly rated customer service to millions of military members and their families. Only available to military members, veterans and affiliated military members.

Compare up to 4 providers

Does fault for the accident matter?

It could, depending on where you live. Most states have laws in place that make it illegal for insurance companies to increase your rates for an accident that wasn’t your fault. But figuring out who’s is at fault can be tricky, especially if there are no witnesses or hard evidence.

Even if you file a police report right away, it’s up to the two insurance companies involved to use the evidence they have to decide who’s at fault for the accident. If there’s a dispute and you have collision coverage, you can file a claim with your insurer to fix your car while it hashes out the details with the other party’s company.

In most states, all accidents you’re involved in eventually show up on your driving record, regardless of fault. Except in the case of DUIs and accidents resulting in serious injury or deaths, most accidents are wiped clean from your driving record in three to five years.

What is personal injury protection?

What is personal injury protection?

PIP covers the costs of medical bills for yourself and passengers in your vehicle if you’re in an accident, regardless of who’s to blame.

PIP is required in the 15 states that have what’s called no-fault insurance laws.

  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Pennsylvania
  • Texas
  • Utah

What if the accident was caused by another driver of my car?

In most cases, all drivers who live in your house are automatically covered by your insurance policy while driving your car. So if your spouse is driving your car and gets into a wreck, your insurance policy covers the damages. Unfortunately, it also means your rates will likely increase if they’re legally at fault.

The same goes for a friend, nephew or roommate. Calling it permissive use, most insurers cover damages caused by other people you’ve granted permission to drive your car.

Also most insurance policies cover the car, not necessarily the driver. So if a friend gets into an accident while driving your car, your insurance policy picks up the tab and you suffer the consequences in terms of rate hikes. Your friend’s insurance would serve as secondary or excess insurance if your policy doesn’t cover everything.

How many accidents is too many?

Racking up car accidents is a fast track to sky-high insurance premiums and possibly a ticket into the high risk driver pool. Typically, two or more accidents within a three years is enough to cause trouble with your insurance company, but it can vary by state and insurer.

After a single DUI, your insurance provider can drop you, leaving you to jump through hoops to get insurance and reasonable rates. If you’re in this situation, you might want to focus on high-risk car insurance and filing an SR-22 certificate with the state.

How can I get cheap car insurance after an accident?

If you’re involved in an accident, you have a few ways to position yourself for lower rates:

  • Ask if you’re eligible for accident forgiveness.
  • Pay out of pocket for minor fender benders.
  • Take a safe driving course.
  • Increase your deductible.
  • Compare your coverage options with other providers.
  • Wait for your driving record to clear after three to five years.

Who offers cheap car insurance after an accident?

Many insurance companies are known for turning a blind eye to red marks on your driving record or offering high-risk insurance. You might pay higher premiums for high risk insurance, but if you have limited options, getting a quote from these companies could help you stay on the road.

Bottom line

Accidents happen. And if you’re not careful, they could cost you significant insurance premium spikes. To prevent an accident from ruining your rates, find a company that offers accident forgiveness to safe drivers or an insurer that writes policies for high-risk drivers.

Take control by comparing your insurance options to find the best rate and coverage for your driving needs and habit.

Find the cheapest rates

Compare the best car insurance companies near you.

Your information is secure.

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