How Much Does Car Insurance Go Up After An Accident?

Planning to file a claim with your auto insurance provider? Whether you’re filing for a totaled car or accident, filing a claim can come with a substantial increase in premium rates. Here are a few important points to consider when filing a claim.

According to InsuranceQuotes, the average increase in the U.S. is between 34% and 41% for someone with full coverage that includes collision and state-mandated liability costs. For example, if you have a clean driving record and your annual premium is $1,555, if you file an at-fault accident claim, your premium could increase to $2,090 or more based on where you live.

Furthermore, a joint study between InsuranceQuotes and Quadrant Information Services shows that a single auto claim can lead to significant premium increases. Additionally, premium increases have risen incrementally over the last few years.

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      Insurance rate effects after an accident

      The increase you can expect to see on your insurance premiums after an at-fault accident varies by location, driving record, vehicle and the insurance company. Upon reviewing the data below, we found that drivers should expect anywhere from a 23% to 73% increase in premiums in year one after an at-fault accident.

      Here are some typical post-accident insurance rates in the first year following an at-fault accident with popular U.S. car insurance companies:

      CompanyAverage Premium After At-Fault Accident% Change in Average Premium After At-Fault Accident
      Nationwide
      $2,174 per year / $181 per month
      61%
      Farmers
      $2,226 per year / $185 per month
      6%
      Progressive
      $2,772 per year / $231 per month
      73%
      Liberty Mutual
      $2,358 per year / $196 per month
      43%
      State Farm
      $1,617 per year / $134 per month
      23%
      Geico
      $1,997 per year / $166 per month
      57%
      Allstate
      3,017 per year / $251 per month
      60%

      Progressive comes in as the insurance company with rates most affected by an at-fault accident within the first year after the accident, with a whopping 73% premium increase. State Farm, with a 23% premium increase, comes in as the insurance company with rates least affected by an at-fault accident.

      Insurance rate effects by state

      While the numbers show your rates could surge after an accident regardless of where you live, some states report costlier increases than others. As the InsuranceQuotes study noted, the following five states reported the largest premium increases after a single auto claim worth $2,000 or more:

      • California: 63.1% increase
      • New Hampshire: 60.3% increase
      • Texas: 59.9% increase
      • Massachusetts: 57.3% increase
      • North Carolina: 57.3% increase

      States with the lowest premium increases after a similar claim included:

      • Maryland: 21.5% increase
      • Michigan: 26.1% increase
      • Oklahoma: 27.9% increase
      • Montana: 30.2% increase
      • Kentucky: 30.6% increase

      Experts who commented on the study blame the wide swings in premium increases on the fact that insurance regulations largely vary by state. In California, for example, voters passed a proposition in 1988 that limited the factors insurance companies could use to set auto rates. Because California insurance premiums from that point forward could only be based on driving record, average miles driven and years of experience, it’s only natural for at-fault claims to cause premiums to burst.

      In Maryland, insurance companies can base premiums on factors including gender, age, occupation, credit score and marital status. The state’s broader base of rules for insurance companies may punish unmarried young men with bad credit whether they’re good drivers or not, but it’s likely the reason Maryland reported the lowest after-accident premium surges of any state.

      Car insurance rates after an accident, explained

      How long will my rate be higher?

      Increases in your insurance premium can last as long as three to five years after an at-fault accident if damages to your vehicle exceed over $2,000. Rates vary, with some insurers charging much more than others.

      How to lower your rates

      While you can’t change the accident after it’s happened, there are a few steps you can take to try to reduce your premium:

      • Ask about accident forgiveness: This is a proactive tip instead of a reactive one, but when shopping for car insurance ask insurance providers if they have an accident forgiveness practice. Not all companies offer this, but those that do will give you one at-fault accident with no increase in premium if you fit certain criteria.
      • Consider your deductible: Insurance premiums and insurance deductibles have an inverse relationship. When you select a lower deductible, it results in a higher premium. When you select a higher deductible, it results in a lower premium. If your premiums go up after an at-fault accident, consider increasing your deductible (if affordable) to decrease your annual premium.
      • Avoid filing claims for small things: Insurance companies assess your premiums based on the financial risk you pose to the company. More claims can mean more payouts for the insurance provider. If you’ve recently filed a claim on an at-fault accident, don’t submit other claims for smaller things for a while.
        Shop around. As you saw from the data we collected above, the percentages of increase to premiums after an at-fault accident vary greatly by company. It never hurts to get some quotes from other providers.
      • Increase your credit score. This won’t be an immediate benefit as increasing a credit score can take some time. However, insurance providers seem to offer better premiums to those with credit scores greater than 600.

      [ Read: When Should You Downgrade Your Car Insurance? ]

      Which claims increase your rates the most?

      Not surprisingly, the InsuranceQuotes study concludes that bodily injury claims can cause your premiums to spike the most.

      “Bodily injury claims are filed whenever a driver causes injuries to individuals as the result of an accident,” notes the press release. “And because they are often so costly, every state except New Hampshire requires drivers to obtain a minimum amount of coverage for these circumstances.”

      As the numbers show, a single bodily injury claim will result in an average premium increase of 48.6%. However, some states reported larger premium hikes after bodily injury claims, including California (73.2%), New Hampshire (65.9%), North Carolina (65.9%), Texas (64.8%) and Massachusetts (62.3%).

      Comprehensive auto claims resulted in the least significant premium increases overall. Unlike bodily injury claims which can result in significant medical bills, comprehensive claims include instances like getting bad gas in your car, hitting a deer or having a tree fall on your car.

      In each of these cases, the costs are usually insignificant. Still, the average premium increase after a comprehensive claim was 2% nationally across the board. Only Nebraska (10.6%), Louisiana (9.7%), Minnesota (7.1%), Wisconsin (6.9%) and Iowa (6.8%) reported increases much higher than average.

      [ Next: Best Cheap Car Insurance Companies ]

      What if the accident wasn’t my fault?

      If your insurance company doesn’t offer accident forgiveness, whether or not your rates will increase after an accident in which you were not at fault is insurance provider specific. Some providers will not increase your premium if this was your first accident, but if you have several accidents, even if you are not at fault, it could result in an increased premium.

      Your provider looks at how risky you are to insure. If you have an at-fault accident, you are a higher risk. If you have one not-at-fault accident, you may not be perceived as higher risk. But if you have several not-at-fault accidents, that will increase your perceived risk level with the insurance provider because you are driving in high-risk for accident situations, whether you’re at fault or not.

      The bottom line is, while you are better off to have a not-at-fault accident, any accident at all may increase your auto insurance rates.

      Frequently asked questions

      Generally, when your car’s total repair costs exceed the car’s value, then it is considered totalled. However, the final determinant varies by state and insurance policy as each goes by their own threshold for determining whether a vehicle is at a total loss. Insurers typically rely on various factors such as the condition, mileage, age and resale value of the car and the value of similar cars in your area to determine your car’s cash value.

      There are two types of coverage that can help pay for a totaled car. Comprehensive coverage helps you in the event your vehicle is damaged from theft or natural disaster. On the other hand, collision coverage helps pay for your car’s repair costs in the event of a collision.

      Your insurer will calculate repair costs to determine what it will cover. If you have comprehensive or collision coverage, once you have paid your deductible, the rest of the repair costs or the replacement cost of your vehicle will be paid by your insurance company up to its actual cash value.

      After filing a claim, your insurance company will assign an adjuster to assess the damage of your case. The insurer will review the police reports, review photos of the damage and interview witnesses of the crash or those involved in the crash, and work with the adjuster to determine who is at fault for the accident. 

      Some insurers offer accident forgiveness programs, which will be stated on your insurance policy. Accident forgiveness coverage enables your insurance rate to not increase even in an at-fault accident. However, it is best to contact your insurance agent to find out how your insurance rate will change.

      You should always tell your insurer if you were involved in an accident. No matter how minor, not reporting an accident can result in higher costs that can exceed higher premium rates.If the other driver sues you, your insurer can refuse to honor your policy, which means that you will be responsible for all legal bills in the plaintiff’s favor. 

      It is best to immediately report an accident, do your research and ask your agent about your options. If your insurer must raise your premium, you can shop around for a new policy, increase your deductible, look for discounts and enroll in a driving course.

      We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Holly Johnson

      Contributing Writer

      Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.

      Reviewed by

      • Nashalie Addarich
        Nashalie Addarich
        Insurance Editor

        Nasha Addarich is an editor at The Simple Dollar and a former attorney who specializes in home insurance, auto insurance, life insurance, and savings. She is a former contributing editor to Reviews.com.