Does Your Car Insurance Go Up After an Accident?
Last Updated on November 22, 2022
So you’ve been involved in a car accident, and you’re worried about the cost of your insurance. Will your insurance rates rise after an accident? How much does an accident affect your insurance premiums? Below, we’re answering all your questions about whether or not insurance goes up following an accident.
Table of Contents:
- If You Cause an Accident, Your Insurance Rates Will Go Up
- How Much Will Your Premium Increase?
- Some Insurance Companies Have Accident Forgiveness
- You Might Lose Your Good Driver Discount
- Expect Rates to Double After a Second At-Fault Accident
- Will Rates Go Up If I’m Not At-Fault?
- How to Handle a Rate Increase
If You Cause an Accident, Your Insurance Rates Will Go Up
Drivers who cause an accident are riskier to insure than drivers who have never caused an accident. If you’re involved in a collision, and you’re deemed to be at-fault (even partially), then you can expect your insurance rates to increase.
Your insurance rates will likely stay high for a period of 5 to 7 years after the collision.
Different insurance companies raise rates in different ways. Some insurance companies are relatively lenient about your first offense and may only raise insurance rates by 15% to 25%. Other insurance companies are exceptionally harsh and may increase rates by 50% or 100%. Higher rate hikes are particularly common for younger drivers involved in at-fault collisions.
How Much Will Your Premium Increase?
On average, insurers tend to increase premiums by nearly 50% after an at-fault accident. Some insurers increase rates by more than others. Progressive, we found, increases rates by an average of 61% after a single at-fault accident. Erie, on the other hand, only increases rates by 18%. Take a look at the table below to see the breakdown by company.
| Company | Average Annual Premium | Average Premium After an At-Fault Accident | Dollar Increase | Percent Increase |
|---|---|---|---|---|
| AAA | $2,389 | $3,453 | $1,064 | 45% |
| Allstate | $2,438 | $3,149 | $711 | 29% |
| American Family | $1,627 | $2,301 | $674 | 41% |
| Erie | $1,321 | $1,562 | $241 | 18% |
| Farmers | $1,524 | $2,144 | $620 | 41% |
| GEICO | $1,297 | $1,900 | $603 | 46% |
| Nationwide | $1,383 | $1,802 | $419 | 30% |
| Progressive | $1,561 | $2,507 | $946 | 61% |
| State Farm | $1,397 | $1,769 | $372 | 27% |
| Travelers | $1,447 | $1,975 | $528 | 36% |
| USAA | $1,209 | $1,742 | $533 | 44% |
Some Insurance Companies Have Accident Forgiveness
Several insurance companies, such as Allstate, GEICO, Farmers, State Farm, and Progressive, have accident forgiveness programs, which means they will not raise rates after your first at-fault collision. Other insurance companies will let a single accident slide.
This never happens with major collisions. If you totaled a vehicle, for example, your insurance rates would likely rise. If you filed a claim after a fender bender, however, where you hit the vehicle in front of you, then your insurance company might let that single minor incident slide.
You Might Lose Your Good Driver Discount
Some insurance companies claim not to raise rates after a single accident. However, there’s a small loophole to this rule: you’ll lose your good driver discount because you no longer have a clean driving record.
A good driver discount could be anywhere from 15% to 20%, depending on your insurance company. Most insurance companies continue giving discounts after each accident-free year. If you have three years of clean driving, for example, then you might have a 10% good driver discount. If you have five years, that discount might be as high as 20%.
Expect Rates to Double After a Second At-Fault Accident
If you’ve been in a single at-fault accident, then your rates will almost certainly rise. However, most insurance companies won’t raise your rates by more than 50% after your first accident.
This will change after your second at-fault accident.
If you’ve been involved in your second at-fault accident within the last 5 or 7 years, then you can expect a significant jump in your car insurance. In this situation, rates typically double – rising by 100%. Some insurance companies will increase rates by as much as 150%.
Will Rates Go Up If I’m Not At-Fault?
So you were involved in a collision – but it’s not your fault. Maybe another driver hit you on the road or crashed into your vehicle in a parking lot.
Naturally, you’d think your insurance rates would not rise. The collision wasn’t your fault, after all.
Unfortunately, this isn’t always true. Some insurance companies will raise rates significantly after a collision where you’re not at-fault. If you’ve been involved in multiple not-at-fault collisions, then your insurance company might raise your rates substantially – even if you’ve just been a victim of bad luck.
There are laws in place to prevent this from happening. Certain states prevent insurance companies from raising your base premium if you’re not at fault for a collision, for example. Other states require drivers to be at least 50% at-fault before their rates rise.
Laws Preventing Rate Hikes
In Massachusetts, for example, your base insurance premium can only increase after an accident if you’re more than 50% at fault and the claim amount is over $500 (after your deductible). In California and Oklahoma, insurance companies cannot raise rates on drivers involved in collisions where they’re not at-fault.
Many states also prevent insurance companies from raising rates if you make a claim under your comprehensive coverage. If your car was damaged by hail and you make a claim, for example, then you can expect insurance rates to stay the same.
As reported by The New York Times, this hasn’t stopped insurance companies from raising prices on drivers involved in not-at-fault collisions. The New York Times cited a study by the Consumer Federation of America that found GEICO and Farmers both raised quoted rates by 10% or more after a not-at-fault collision, for example. State Farm was the only major insurance company in the United States that never increased quoted rates for drivers involved in not-at-fault collisions.
These laws vary widely between states. Talk to your insurance agent or compare quotes today to discover how your state handles higher insurance premiums after not-at-fault claims.
It’s also important to remember that a few accidents are 100% the fault of a single driver. Typically, one driver is at least partially at-fault, even if the majority of fault lies with the other driver.
How to Handle a Rate Hike: Compare Car Insurance Quotes After an Accident
An accident is never a good thing. However, there’s never been a better time to compare car insurance quotes. After your accident, take a few minutes to compare car insurance quotes online.
Some insurance companies are relatively lenient after a single at-fault incident.
Other insurance companies – like your own current insurance company – might make rates prohibitively expensive after a single accident.
Most insurance companies, unfortunately, will significantly raise your rates after two or more at-fault accidents.
In any case, it’s never a bad idea to shop around for car insurance. Compare insurance prices today to find the best rates after your accident.
