Car accidents are an unfortunate reality. Recent data from the National Highway Traffic Safety Administration indicates nearly 6 million car accidents occurred in the U.S. in 2022. While the immediate aftermath of a collision is stressful, many drivers are later surprised by the impact an accident can have on their car insurance premiums, even if they weren’t at fault. While your driving record is only one factor insurers consider, a single accident can significantly affect what you pay.
Understanding Car Insurance Rate Increases After an Accident
The extent to which your car insurance premium increases after an accident depends on a variety of factors. These include your insurance company’s policies, the state you live in, the type of car you drive, the severity of the accident, and, most importantly, who was at fault.
Brian Moody, executive editor at Kelley Blue Book, notes, “Generally speaking, your rate will go up 10% or less if you’re not at fault. If you are at fault, it’s closer to 45%.”
Image showing a car accident scene, symbolizing the unexpected rate increases that can follow, even when not at fault.
Finding the Best Car Insurance After an At-Fault Accident
If you’re found liable for an accident, your car insurance rates will likely increase, regardless of your insurer. However, some companies are more lenient than others. Here are a few insurers that stand out:
Geico: Best for Affordability
Geico is a popular choice for drivers seeking affordable car insurance, particularly after an at-fault accident.
Who’s this for? Geico often has some of the lowest average annual premiums among major insurers, even after an at-fault accident.
Standout benefit: Geico offers accident forgiveness, which means your insurance rate won’t increase after your first at-fault accident.
Nationwide: Best for New Car Owners
Nationwide offers unique benefits for owners of newer vehicles.
Who’s this for? Nationwide provides gap insurance on cars up to six years old, covering the difference between what your insurer pays if your car is totaled and what you still owe on your loan or lease.
Standout benefit: Nationwide offers new car replacement coverage, replacing your vehicle with the same make and model if it’s a total loss.
Erie: Best for Seniors
Erie is known for its affordable premiums and customer satisfaction, especially among senior drivers. Note that Erie is only available in 12 states and Washington, D.C.
Who’s this for? Erie’s rates for high-risk drivers are often lower than the national average. They also offer a reduced usage discount for drivers who store their vehicle for at least 90 days, which can be beneficial for seniors who are snowbirds.
Standout benefits: Erie’s Rate Lock feature can prevent your rates from increasing, even after an accident, as long as you don’t make changes to your policy.
Image of the Erie Insurance building, representing the company’s rate lock feature that can prevent premium increases after an accident.
How Long Does an Accident Affect Your Car Insurance Rates?
An accident typically remains on your driving record for three to five years, although this can vary by state. For example, in Pennsylvania, it’s one year, while in Massachusetts, it’s six. Insurance companies access your driving record through your Motor Vehicle Report (MVR), which lists any moving violations, traffic tickets, and accidents. Claims you’ve made for repairs will also appear on your CLUE (Comprehensive Loss Underwriting Exchange) report.
Will My Rate Go Up Even If The Accident Wasn’t My Fault?
Even a not-at-fault accident reported to the police or your insurance company can lead to a premium increase. Insurers assess risk, and statistically, drivers involved in more crashes are more likely to be in accidents in the future. However, some states, such as Oklahoma and California, prohibit insurance companies from raising rates after a not-at-fault accident.
Preventing an Increase After an Accident
While you can’t always prevent accidents, you can take steps to minimize their impact on your insurance rates:
Pay Out of Pocket
For minor accidents, consider paying for repairs yourself rather than filing a claim. However, be aware that some policies may be invalidated if your provider discovers an unreported accident. Some states, like New York, require an accident report to be filed with the Department of Motor Vehicles if damages exceed a certain amount or if anyone is injured.
Accident Forgiveness
Many auto insurance companies offer accident forgiveness, either as part of a standard policy or as an optional rider. This prevents your insurance rates from increasing after your first at-fault accident. Progressive, for example, won’t raise your rates for small claims (under $500) in most states. They may also forgive larger accidents if you remain accident-free for five years.
Cars bumper to bumper on a highway
Image of cars in traffic, symbolizing the potential need for accident forgiveness policies in everyday driving situations.
Lowering Your Insurance Rates After an Accident
If your rates increase after an accident, consider these strategies to bring them down:
Make Changes to Your Coverage
Review your coverage and identify potential areas for cuts. If your state doesn’t require personal injury protection or medical payment coverage, you may consider dropping it. For older cars, dropping collision or comprehensive insurance could also save you money.
Shop for New Insurance
Insurance companies offer different rates, so shop around for the best deal, regardless of your driving record.
Look for Discounts
Take advantage of available discounts. Farmers Insurance, for example, offers 23 discounts to auto insurance customers. Common discounts include bundling, safety device, defensive driver, and paperless billing discounts.
Improve Your Credit
In most states, insurance companies use your credit history to determine your rates. Improving your credit score by paying bills on time and reducing credit usage can lower your premiums. Services like Experian Boost® can help increase your credit score by reporting eligible rent, phone, and subscription service payments.
Buy a Different Car
Trading your vehicle for a less expensive model could lower your rates, as insurers base premiums on the cost to repair your car.
FAQs
How Much Does Car Insurance Go Up After An Accident?
If you are at fault, your premiums could increase as much as 45%.
How long does an accident stay on your driving record?
Insurance companies generally look at the past three to five years.
What is accident forgiveness?
Many insurance companies offer accident forgiveness, preventing your rates from increasing after your first accident.
Will my insurance go up if the accident wasn’t my fault?
A not-at-fault accident could cause your rates to increase, though not as much as if you were responsible. Some states prohibit insurers from hiking rates following a not-at-fault accident.
By understanding the factors that influence car insurance rates after an accident and taking proactive steps to manage your coverage and driving record, you can minimize the financial impact of unforeseen events.
