How a car accident affects your car insurance

When competing for your business, many car insurers may woo you with plenty of special features and rewards. But after you choose a policy and end up in an accident, your company’s stance on rate hikes might leave you feeling far from looked after.

Know what to expect and how to prevent an accident from ruining your insurance premiums.

Does car insurance increase after an accident?

Yes. Unfortunately, car insurance premiums are almost always certain to increase after an accident, whether or not you were responsible for causing it. But how much your premium increases by really depends on whether the accident was your fault or not. For example, accidents that weren’t your fault are likely to mean smaller price hikes compared to accidents that were your fault.

If you were involved in an accident but didn’t make any claim, you could still see your insurance premium rise. This boils down to some insurers believing that you’re more likely to be involved in another accident and therefore more likely to make a claim next time round.

At-fault claims

If you were responsible for causing an accident and made a claim on your insurance, you insurer will register this as an at-fault claim and premiums will increase to factor in your higher risk of being involved in another accident.

On the other hand, you may have been involved in an accident whereby your insurer was unable to hold any other parties responsible. In this case, your insurer will ultimately hold you responsible and this too will be registered as an at-fault accident.

Non-fault claims

In certain situations, your premiums could go up after you’ve declared a non-fault claim to your insurance provider. Even though it wasn’t your fault, your insurer may believe you are at a greater risk of having an accident and claiming on your insurance.

These risks could relate to you travelling during rush hour traffic or peak times. Once you’ve been involved in an accident, insurers generally calculate that your chances of an accident happening again are high.

Why do insurance rates go up by 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 bump, your insurer will likely reassess you as a riskier policyholder, raising your rates in turn.
• You no longer qualify 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.

How much does insurance go up after an accident?

How much your insurance premium goes up by after an accident depends on several factors, including your overall driving history, the cause of your accident, the severity of the outcome and where you live.

With this in mind, and depending on your own circumstances, the increase could be as little as a few extra pounds or an alarming few hundred extra pounds.

In the UK, for an at-fault accident involving bodily injury, your rates could increase by as much as 20% to 40%.

Does the type of accident matter?

Yes, as does the severity of your accident. Accidents caused while driving under the influence of alcohol or drugs tend to result in points on your driving licence, possible driving convictions and 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 made under comprehensive coverage, such as clipping a wing mirror or putting the wrong fuel in the tank, might not affect your premium at all. But it all depends on your own circumstance and the insurer that covers you.

Will an accident affect my no claims discount?

If you have an accident and have protected your no claims discount (which usually costs extra on top of your policy premium), then making a claim is unlikely to affect your no claims discount. You’ll need to check the conditions of your no claims discount protection though and make sure you don’t go over the permitted number of accidents within a certain time period.

If you have an accident and haven’t got no claims discount protection, then making a claim will more than likely affect your no claims discount.

It’s worth pointing out that even if your no claims discount stays in tact after an accident, your insurance premium won’t be so lucky as this discount tends to be applied once your risk has been calculated.

How can I get cheap car insurance after an accident?

Car insurance isn’t a “one size fits all” so you’ll need to do a little research to match up a policy’s cover benefits with what you actually need, and the price it costs. If you made a claim due to an accident, an insurer may class you as a higher risk driver but that’s not to say that you won’t have options. You might pay higher premiums for cover but if you compare quotes above using our tool, you could find a deal that helps you to stay protected on the road without leaving you out of pocket.

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

• Pay out of pocket for minor bumps.
• Take a safe driving course.
• Increase your excess.
• Compare your coverage options with other providers.
• Wait for your driving record to clear after three to five years.

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.

Frequently asked questions

• Do I need to inform my insurer about an accident even if I don't make a claim?

  When you take out car insurance, your policy is valid based on all the information you provide as being accurate. This also includes keeping your insurer updated about any changes or incidents that may occur. Therefore, you will need to disclose details of any accidents you and your car have been involved in for the previous five years, including any accidents that you were not responsible for and didn’t make a claim for.

  Failure to inform your insurer about any previous accidents could invalidate your policy.

• How long does an accident affect your insurance rates?

  Insurers usually want to know about your most recent accidents and claims you may have made within the last five years. So any historic accidents that are older shouldn’t apply. Ask your insurance company about the specifics of your policy.