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- Car insurance premiums can increase by an average of 44% after an at-fault accident.
- Where you live and the cost of damages associated with your accident can help determine how much your insurance premiums increase after an accident.
- Car insurance companies with accident forgiveness programs may offer more competitive rates for car insurance.
Sometimes car accidents happen despite our best efforts. It could be the result of weather, road detours, or an impaired driver. Whatever the reason, an accident on your driving record could mean a big jump in car insurance rates, depending on which car insurance provider you have. Other rate factors that affect your premium include your credit score, driver history, the car you drive, and where you live.
Many experts agree that drivers can expect to see their car insurance premiums go up after an accident. However, understanding how much premiums go up after an accident is a key factor in deciding whether or not to file a car insurance claim.
How Much Car Insurance Goes Up After an Accident
The difference in car insurance premiums before and after an accident can be significant, but it also depends on the type of insurance you have. For drivers with full coverage insurance, a car accident on file with a car insurance company can increase average premiums from $1,555 a year to $2,090 a year — or a 34% difference. This would include a policy with collision, comprehensive, and state-mandated liability insurance.
When you have minimum coverage auto insurance, the difference in premiums after an accident is much higher than that of full coverage insurance. With a 44% difference between pre- and post-accident rates, the average annual premium increases from $545 to $784 per year.
With minimum car insurance requirements fluctuating from state to state, there are some states that require significantly more insurance coverage than others. For example, research shows that California, Maine, and Massachusetts all have the highest change in auto insurance premiums after an accident.
- California: 73% increase
- Maine: 64% increase
- Massachusetts: 56% increase
Your car insurance rates can also be impacted by the kind of accident that you have. Some accidents result in higher rates, such as incidents involving a DUI or DWI.
How Much Car Insurance Premiums Increase After an Accident In Each State
*Data provided by Coverage.com.
Should You File a Claim After an Accident?
For drivers who are found at fault in an accident, the average increase in minimum coverage auto insurance premiums is 44% higher than non-accident premiums.
In a recent study we conducted, we saw that 1,087 U.S. drivers are not always so honest about what happens behind the wheel. Results showed that only 43% of American drivers file a claim after being involved in a small or moderate car accident. Instead of reporting these damages to their insurance provider, these drivers opt to handle the damages themselves, whether it is paying out of pocket or skipping the repairs altogether. The collective attitude of these drivers demonstrates that drivers would often rather face the cost of repairs themselves than file a claim and be penalized for it later with higher insurance premiums.
At-fault vs. no-fault states
Many drivers in no-fault states like California and Maine face insurance increases after an accident. The total increase in insurance premiums after an accident can be several hundred dollars, depending on your home state and insurance policy. Drivers in at-fault states are far more likely to face higher premiums, but determining who is at fault in an accident is not always so clear-cut.
Insurance companies use their own formulas based on popular rate factors to calculate premium costs for customers. Ultimately, the difference in auto insurance premiums before and after an accident depends on where you live and which car insurance provider you have.
How to file a car insurance claim
If you are involved in an accident, you will need to file a car insurance claim so your insurance provider can help with the repair costs.
- Contact your provider. When there is an accident, let your insurer know right away that there has been an incident.
- Provide details of the accident. Your insurance provider will ask about the time, date, location, and weather conditions of the accident.
- Collect contact information. Be sure to collect the contact information of the other driver, including the name, phone number, vehicle details, and insurance information.
- Take photos. Be sure to fully document any damages to your vehicle.
- Provide documentation. If police respond to the scene, be sure to document their names and badge numbers, and request a copy of the incident report to submit to your insurance provider.
- Pay your deductible. Most insurance policies carry a minimum insurance deductible that you must pay upfront before your coverage kicks in to pay the rest.
Furthermore, many insurance companies allow you to file your auto insurance claim online or via your provider’s mobile app.
What if you don’t file an insurance claim?
There are some occasions when it may be best for drivers not to file a claim. Minor incidents that cause little to no damage may be better for you to fix out of pocket than to report it to your insurance company and risk the additional rate increases for months to come.
These are some occasions when drivers may opt not to file a claim:
- Single-driver incidents. If there are no other drivers involved, you likely will not receive coverage under your liability insurance. Collision insurance would cover the damages, but not every policy may include this protection.
- Minor damages. When there are minimal damages, it could be cheaper for you to handle the cost of repairs than pay the deductible needed for your coverage to kick in.
Out-of-pocket payments between drivers can be very risky when insurance companies are not involved. A driver could later deny receiving payment, or there may be medical costs that you may have to pay. Many jurisdictions also have specific rules regarding what must be reported to your insurance provider, so it is always important to check your state’s insurance laws before proceeding.
Accident Forgiveness Programs
Some insurance companies offer policyholders something called accident forgiveness, which means that the insurer will not penalize drivers with higher premiums after their first accident. A minor accident might not affect premiums if it is the first on your driver record, but several accidents or tickets could lead to higher insurance premiums, as insurance companies are then likely to consider you a high-risk driver in need of high-risk auto insurance.
These auto insurance providers offer accident forgiveness in 2021:
- Allstate offers up to unlimited accident forgiveness, depending on your package.
- Farmers forgives one accident every three years.
- Geico offers free accident forgiveness after five years accident-free or when purchased as additional coverage.
- Liberty Mutual has free accident forgiveness for drivers without a moving violation or accident within five years.
- Nationwide forgives two at-fault or minor violations within three years, or you can purchase add-on accident forgiveness after six continuous months as a Nationwide policyholder.
- Progressive offers accident forgiveness after continuous insurance with any company for six months.
- State Farm gives free accident forgiveness after nine years with one or no accidents.
- Travelers offers accident forgiveness with its Responsible Driver programs that are eligible for drivers with no more than a single accident and minor violation within three years.
Ask The Car Insurance Experts
Robert Raymond
VP of Private Client Advisors, HUB International
What is the best way that someone can lower their insurance rate after an accident?
You should probably consider increasing your physical damage deductibles to help offset premium increases. Many people assume “My rate went up, so I should shop my insurance.” However, the truth is that all insurers will be able to see your claims history and motor vehicle reports. These losses will follow you between insurance companies.
How long does an at-fault accident affect my premium?
Each insurance company is different. Most provide claims-based underwriting back 36 months for accidents and moving violations. However, certain circumstances, such as being cited for reckless driving or DWI/DUI in conjunction with an accident, can be underwritten back 60 months or greater.
When should you not file an auto insurance claim?
Generally, you need to disclose any accident to your insurer, especially if there are other persons or third-party property involved. However, if you do not want to notify your insurer and pay out of pocket for something like vandalism to your vehicle, that is probably OK. Always call your insurance broker or risk advisor for guidance.
Why does car insurance go up if someone files a claim?
Insurance is a spreading of risk across many policyholders. Costs escalate based upon your share of the total risk in the group. More claims means higher premiums and less claims means less premium. Having multiple claims will assuredly have an adverse impact on your insurance costs or your insurability.
David Macknin
President ChicagoRisk
What is the best way that someone can lower their insurance rate after an accident?
We highly recommend maintaining relatively high physical damage deductibles when purchasing auto insurance. First, doing so automatically reduces the fixed loss one incurs, the premiums which must be paid (every six or 12 months), and over time such savings add up nicely. Second, carrying a higher deductible means many physical damage only incidents need not be reported to the insurer and, thus, one’s actuarial record is not harmed.
Will the premiums go up even if the driver is not at fault?
In addition to the simple question of if an accident has an adverse impact, one must also look through two additional lenses auto insurers utilize. First, the frequency — in how many accidents is the insured involved? Second, the severity — how severe are the accidents? It must be noted that many insurers offer a no penalty in case of one’s first accident promotion, sometimes called accident forgiveness.
When should you not file an auto insurance claim?
While paying out of pocket for relatively small sums may be unpleasant, it generally is less expensive overall when compared with higher ongoing insurance premiums (with lower deductibles) plus subsequently increased rates resulting from a history of accidents.
Adrian Mak
CEO, AdvisorSmith
What is the best way that someone can lower their insurance rate after an accident?
The best way to reduce your premiums is to shop around with different carriers to find a better price. Some auto insurance carriers specialize in drivers with less than perfect driving records.
What happens if a driver doesn’t tell their insurance about an accident?
It is always a good idea to tell your insurer about any crash you are involved in. The terms of virtually every auto insurance policy require the policyholder to report any crashes they are involved in.
Will the premiums go up even if the driver is not at fault?
Car insurance premiums increase after a crash because historically, a driver who had a car crash is much more likely to be in a crash in the future compared with drivers who have not had a crash. Car insurance companies increase premiums to account for this higher risk.
Multiple car crashes will cause your rates to increase even further when you renew your policy. In some cases, insurance companies may decide not to renew your policy when your policy year ends.
About the Authors
Lena Borrelli is a freelance writer for Reviews.com. Over the last year, she has covered insurance, finance, and more. She has been featured in TIME with NextAdvisor, Bankrate, The Simple Dollar, MYMOVE, Million Mile Secrets, Coverage.com and more. My favorite article is “How to Invest in Real Estate During COVID?” on Reviews.com.
