How Much Will Your Rates Rise After a Collision Claim?
Last Updated on December 27, 2019
You may have heard that rates rise after an insurance claim. But how much will your rates rise after a collision claim?
Today, we’re explaining how much more you can expect to pay for car insurance after a collision claim.
Insurance Rates Rise an Average of 45% After a Collision Claim
Insurance rates vary widely between states and insurance companies. Across the United States, however, the average driver will see insurance premiums rise 45% after a single at-fault collision claim.
In some states, rates rise much higher after a single collision claim. Insurers in California, for example, cannot use factors like credit score or gender to calculate insurance premiums, which is why driving history plays a much bigger role in insurance premiums. That’s why drivers in California may see rates rise by 70% or more after a single collision claim.
In other states, insurance companies may use hundreds of factors to calculate insurance premiums, with driving history just being one factor. In states like Maryland, for example, your insurance premiums may rise by just 25% after a single collision claim.
Some drivers pay extra to add accident forgiveness to their insurance policies. If you have accident forgiveness on your insurance policy, then your insurer may ignore a single at-fault collision claim.
How Long Do Rates Stay High?
Most insurance companies check your driving history dating back five years. With more serious claims – like a severe accident or DUI – your claim may be stuck on your record for seven or ten years, depending on state insurance laws.
Typically, you won’t pay 45% higher rates for the entire five year period after your at-fault insurance claim; you may pay 45% higher rates the first year, for example, and only 35% higher rates the second year.
The longer you go without making a claim, the less you’ll pay for car insurance. After five years, your at-fault collision claim should be completely removed from your record.
Insurance Rate Increases Vary Between Companies
Some companies like to reward safe drivers who have a clean driving record. Other companies treat collision claims more strictly: they have relatively harsh punishments for drivers with a single at-fault collision claim.
Nationwide and Farmers, for example, are the most forgiving insurance companies to drivers with an at-fault collision claim. Nationwide and Farmers will only raise insurance premiums by 42%, on average, after a single at-fault collision claim.
Certain companies are middle of the road. Progressive, and Liberty Mutual, for example, all raise premiums by around 45%, on average, after a single collision claim.
Finally, towards the higher end of the spectrum, we have GEICO and Allstate, both of which raise insurance premiums by around 47% after a single at-fault collision claim.
Overall, there’s little variance in insurance companies. Most insurance companies stick close to the 45% range when raising insurance premiums after a single at-fault collision claim.
Insurance Rate Increases Vary Between States
State law has a significant impact on how insurance premiums rise or fall after a single claim.
In fact, your state’s insurance laws have a much bigger impact on insurance increases than the policies of your specific insurance company.
In California, for example, voters passed a proposition in 1988 limiting the factors insurance companies can use to set insurance rates. California’s insurance companies can only change premiums based on driving record, average annual mileage, and years of driving experience. That’s why a single at-fault collision claim causes premiums to skyrocket: it impacts one of just three factors insurers can use to calculate premiums.
At the other end of the spectrum, we have states like Maryland. Maryland has a generous insurance law system. Insurance companies in Maryland are allowed to use many factors to calculate premiums, including the driver’s gender, age, occupation, credit score, marital status, driving history, and more. That’s why a single at-fault collision claim will have less of an impact.
Top Five States with the Largest Insurance Rate Increases
As mentioned above, some states have specific laws prohibiting insurers from using certain information to calculate insurance premiums. Because of these regulations, insurers put a bigger emphasis on driving history. That means a single at-fault collision claim can cause premiums to rise much more sharply. States with the highest average insurance rate increases, according to The Simple Dollar, include:
- California: 63% increase
- New Hampshire: 60% increase
- Texas: 60% increase
- Massachusetts: 57% increase
- North Carolina: 57% increase
Top Five States with the Lowest Insurance Rate Increases
The same study linked above revealed that certain states have lower average insurance rates increases than others. In these states, drivers with a single at-fault collision claim are punished much less harshly than drivers in other states:
- Maryland: 22% increase
- Michigan: 26% increase
- Oklahoma: 28% increase
- Montana: 30% increase
- Kentucky: 31% increase
Certain Collision Claims Increase Premiums More Than Others
Not all collision claims are created equal. Certain types of collision claims will increase your insurance premiums more than others.
Bodily injury claims, for example, are more likely to spike insurance premiums than other claims. A bodily injury claim is filed when someone is seriously injured. Bodily injury insurance coverage can compensate an injured party for medical bills, lost wages, and similar expenses.
Property damage claims, meanwhile, may cause less of a spike in insurance premiums. You might file a property damage claim if you collided with another vehicle without anyone being injured, for example.
The value of the claim can also play a role. An insurance company may not raise your rates for a collision claim that caused $1,000 of damage to another vehicle, for example, but they might raise your rates for a claim that led to $200,000 of medical bills.
Final Word
An at-fault collision claim can cause insurance premiums to rise by an average of 45%. However, the specific increase varies widely between states and insurance companies.
Compare insurance premiums today to ensure you’re paying the lowest possible rates for car insurance regardless of your accident history. Even with an at-fault collision claim on your driving record, you can find affordable car insurance for your budget and needs.
