How Much Your Car Insurance Goes Up After an Accident

Here’s How Much You Car Insurance Goes Up After an Accident, and What You Can Do About It

The financial consequences of an accident can linger for years, but they do not last forever.

Accidents and traffic violations typically remain on your driving record for three to five years. The greater the number of accidents or tickets on your driving record, the higher your auto insurance premiums will be.

The amount of insurance that can be increased following an accident is determined by the carrier, who is at fault, and a number of other factors. According to Laura Adams, an insurance expert and host of the “Money Girl” podcast, the cost of an auto insurance policy after an accident can increase by up to 30 percent or more.

While this is often an unavoidable outcome, you can take immediate action to mitigate the negative consequences. What should you do the first time you get back on the road after an accident? Be extremely cautious.

“When you are waiting out an accident surcharge, one very important thing to remember is to drive safely and conservatively,” says Howard Goldberg, vice president of customer solutions for Plymouth Rock Assurance, a regional insurance company in the Northeast. “Remain violation- and accident-free to avoid the unpleasant experience of restarting the clock.”

Then it's time to go online or dial a phone number to minimize the impact on your insurance rate.

Here's what you need to know about your auto insurance after an accident.

How Much Will My Insurance Go Up After an Accident?

According to Adams, almost every auto insurance company will raise your rates after an accident, but it's difficult to say how much.

“Accidents will undoubtedly raise rates,” Adams predicts. “In most cases, accidents cost more than moving violations.”

Most states use a point system to track driver violations, and points will typically accumulate on your driving record if you are involved in an at-fault accident or several, or if you are convicted of certain traffic violations.

“The points on your driving record are what insurance companies see as a red flag and a reason to raise your rates,” Adams explains.

Accidents are assessed differently by each insurance company; a rate increase after an accident on your auto insurance can be as low as $200 or as high as $800, depending on your insurer. We rounded up Bankrate's average rates for full coverage before and after an auto accident to give you a better picture; take a look below to see the differences in rate increases for 11 auto insurance companies.

Why Do Insurance Rates Go Up After an Accident?

It's all about risk for insurance companies. The more dangerous your driving is, the higher your auto insurance premiums may be.

Typically, after an accident, you will file a claim and pay your deductible. Following an accident, your insurer will adjust your rates to reflect any new information they have on your driving history. In many cases, the rate increase — also known as an "accident surcharge" — will not be applied until your policy is due to be renewed.

“If your policy renewal is months away, you will not see any financial impact other than the deductible until the renewal date,” Goldberg says.

An accident does not always imply that your auto insurance will become prohibitively expensive. According to Adams, some insurers may be lenient if it's your first accident and it wasn't your fault. This is especially true if you're enrolled in an accident forgiveness program with your insurer.

If you participate in an accident forgiveness program, your auto insurance rates will not increase after your first at-fault accident. Some insurance companies provide it as a free benefit to loyal customers who maintain a clean driving record. To be enrolled, new drivers or those with a poor driving record may be required to pay a monthly fee.

“In some cases, you have to pay an additional fee for that. In some cases, it is simply something they provide as part of their policy,” Adams explains.

Accident forgiveness programs are available from many major auto insurers, including Allstate, GEICO, Progressive, USAA, and Nationwide.

How to Lower Your Car Insurance Rate After an Accident

Whether you are expecting or have already paid an accident surcharge, there are things you can do to reduce your auto bill other than simply waiting.

• Request a discount: Inquire with your insurance provider about any available discounts. For example, you may be able to combine your home and auto insurance policies, enroll in a defensive driving course, or receive a discount for having certain safety features installed in your vehicle.
• Be a safe driver: The best way to recover from an accident in which you were at fault is to practice safe driving and avoid more accidents or violations, especially in the three years following your accident, when avoiding additional violations and at-fault accidents is critical. Another accident or violation on your record during that time frame will be particularly costly.
• Adjust your coverage: In addition to discounts, you can always look into adjusting your coverages and deductibles to bring your auto premium closer to your budget. However, be cautious when weighing your options; you want to ensure that you have adequate coverage to protect yourself.