What Is a Car Insurance Surcharge?

Last Updated on November 7, 2025

If you recently checked your car insurance paperwork, then you may have noticed a car insurance surcharge.

Sometimes, insurers add a fee or penalty to your premium. This is called a surcharge. In most cases, insurers charge a surcharge because of a recent violation, like an at-fault accident or speeding ticket.

Today, we’ll explain how car insurance surcharges work, how long you need to pay the surcharge and everything else you need to know about car insurance surcharges.

Key Takeaways

• A surcharge is a temporary fee added to your car insurance premium after a high-risk event like an accident, speeding ticket, or lapse in coverage.
• Surcharges typically last 6 months to 3 years, depending on your insurer, your driving record, and state laws.
• Common causes include at-fault accidents, multiple claims, DUIs, late payments, or adding a high-risk driver to your policy.
• Average premium increases range from 25% to 70%, with higher penalties for major violations like DUIs or reckless driving.

About Car Insurance Surcharges

A car insurance surcharge is a temporary fee your insurer adds to your regular premiums after a higher-risk event—like a ticket or accident.

Nowadays, surcharges have become more common due to rising repair costs, inflation, and increased claims severity.

Insurers use them to balance short-term risk until your record improves or the violation “ages off” your driving history.

Instead of paying $100 per month for car insurance, for example, you might pay $120 per month with a $20 surcharge.

Why Do Insurers Add a Surcharge?

Insurers typically add a surcharge because of something the driver did. Typically, you (or someone on your policy) caused an accident, committed a traffic violation, or was caught committing some other offense.

Today, insurers may add a surcharge after just two serious claims within a three- to five-year period, depending on the company and state.

However, some insurers offer “surcharge forgiveness” or “accident forgiveness” programs that protect your rates after your first minor at-fault accident—especially if you have a long history of safe driving.

Surcharges help insurers manage risk.

If you commit multiple violations within a short period, then you’re a higher risk driver to insure. You have committed multiple violations in your recent history, so your insurer believes you are more likely to commit more violations in the near future.

Some insurers are more strict with surcharges. They might add a surcharge after just two speeding tickets in a three year period, for example. The insurer believes you’re a higher risk driver to insure, so they charge higher rates.

Common Reasons for a Car Insurance Surcharge

If you’ve spotted a surcharge on your premium, then it could be related to the following reasons:

Lapse in Coverage: If you let your car insurance expire, or if you fail to pay premiums on time, then you could have a lapse in coverage. A lapse in coverage is associated with high risk driving behavior. If you let insurance lapse and continue to drive, then you are personally liable for any damage you cause, which could mean paying thousands out of pocket for medical bills or vehicle damage. If you have one or more lapses in coverage in recent years, then your insurer could add a surcharge.

Late Payment: Do you frequently pay your car insurance late? An insurer may not cancel coverage if you pay premiums a few days late. Most insurers have a grace period of 10 to 20 days. However, the insurer could add a surcharge for making late payments.

Traffic Violations: Speeding tickets, reckless driving convictions, and other citations could all lead to a surcharge. Typically, insurers ignore one or two traffic violations, but more traffic violations can increase the risk of a surcharge.

DUI/DWI Convictions: Some insurers cancel your policy after a DUI or DWI conviction. Others add a surcharge. If this is your first DUI/DWI on an otherwise clean record, then you may only need to pay a surcharge.

Multiple At-Fault Accidents: A single at-fault accident can raise premiums anywhere from 25% to 70%, depending on your state, insurer, and driving record. Drivers using telematics programs (like Progressive Snapshot, State Farm Drive Safe & Save, or Allstate Drivewise) may see smaller surcharges or recover normal rates faster by demonstrating good driving behavior.

Other Reasons for a Surcharge

We listed the most common reasons for a surcharge above. However, you might pay a surcharge for any number of reasons:

Adding a Teenage Driver: If you recently added a teenage driver to your policy, then your insurer may add a surcharge to your policy. Adding a young, inexperienced driver to your policy significantly increases rates.

Life Changes: Maybe you got divorced and no longer qualify for a marriage-based discount. Maybe you unbundled policies, or maybe you moved to a new ZIP code. A life change could lead to a car insurance surcharge.

State Penalties and DMV Surcharges: Some states—like New Jersey, New York, and Texas—still impose official “state surcharges” after major violations (like DUIs or driving uninsured). Other states have phased these out and replaced them with reinstatement or administrative fees instead. Always verify with your DMV or Department of Insurance for the latest state-specific surcharge rules.

How to Avoid a Car Insurance Surcharge

Car insurance surcharges are annoying and expensive. If your insurer has already added a surcharge to your invoice, then it’s unlikely you can remove it.

You could call your insurer to verify the reason for your surcharge. It could have been added to your bill erroneously. In most cases, however, the insurer adds the surcharge soon after an incident, and it’s obvious why you’re paying the surcharge.

To avoid a car insurance surcharge in the future, practice the following tips:

Avoid Traffic Violations: Speeding tickets, reckless driving citations, DUIs, and other incidents can all lead to car insurance surcharges.

Pay Out of Pocket for Smaller Accidents: If the damage is under your deductible or only involves your own vehicle, it may be cheaper long-term to pay out of pocket instead of filing a claim. Modern insurers now use claim frequency as a stronger rating factor—so multiple small claims can trigger surcharges even if you weren’t at fault.

Pay Premiums On Time: If you frequently pay car insurance premiums late, then your insurer could add a surcharge to your invoice. It also increases the chances of a lapse in coverage. Pay premiums on time to avoid a surcharge, a lapse in coverage, or other auto insurance issues.

Drive More Carefully: If you already have a traffic violation, speeding ticket, or at-fault accident on your record, then you should drive more carefully to avoid a car insurance surcharge.

How Long Does a Surcharge Last?

A surcharge lasts several months to several years, depending on the type of surcharge.

A surcharge for a severe incident – like a DUI conviction or at-fault accident – could last several years, depending on state laws and your insurer’s policies.

A surcharge for a less severe incident, like a traffic violation or lapse in coverage, may only last a few months.

Some insurers temporarily add a surcharge before adding a rate hike. They might raise your rates temporarily until they verify your driving history at a later date. That means your surcharge could become permanent, raising insurance rates in the future.

Contact your insurer or the DMV to verify how long your car insurance surcharge will last. Your insurance company should be able to easily explain how your surcharge works.

Am I Required to Pay My Car Insurance Surcharge?

If your insurer has added a surcharge to your account, then you are required to pay that surcharge to maintain coverage with that company.

However, you are not required to stick with any insurance company. You can cancel your policy, get a refund on premiums, and switch to a new provider at any time.

In fact, many insurance experts recommend comparing quotes after an at-fault accident or another incident. Some insurers treat a single at-fault accident seriously and immediately add a surcharge. Other insurers ignore a single accident and continue to charge competitive rates.

Similarly, if the state has added a surcharge to your auto insurance policy, then you are legally required to pay that surcharge. The DMV may track this surcharge, which means you pay the surcharge even if you switch to a new insurer.

Don’t want to pay your surcharge? Unhappy with your current insurance company? There’s never a better time to make a switch to a new provider.

How to Shop Around After a Surcharge

If you’ve received a surcharge, you’re not locked in. Many drivers save by comparing quotes from other insurers immediately after an incident.

Nowadays, AI-powered insurance comparison tools and apps will make it easy to find a new company that overlooks minor violations or offers forgiveness programs.

You can often find competitive rates again within 6 to 12 months if you maintain a clean record and enroll in a telematics or safe driver program.

Final Word on Car Insurance Surcharges

Surcharges are extra fees that your insurer adds to your monthly premiums. Insurers use surcharges to cover the extra costs of handling your policy.

If you have recently committed multiple traffic violations, caused multiple at-fault accidents, or engaged in other high-risk behavior, then your insurer could add a surcharge to your policy.

To learn the specific reason for your surcharge, contact your insurer.