Accidents happen, including auto accidents. While they’re usually unexpected, they can be prepared for by having the right auto insurance coverage. In the event of an accident, your coverage will kick in and your insurance company can help pay for damages or medical bills.
In most cases, auto accidents can cause your insurance rates to go up, but it doesn’t happen automatically and you may be able to avoid an increase.
WHEN YOUR RATES WILL STAY THE SAME
Best case scenario, your rates will not increase just because of an accident. If you have a history of safe driving and have not filed any prior claims, minor accidents or fender benders may not negatively affect your rates.
Your rates also may not be affected if you are not at fault for the accident. (This is particularly the case for insurers who have accident forgiveness, which rewards drivers for safe driving and lack of filed claims.)
WHEN YOUR RATES WILL INCREASE
If the accident was your fault, someone was injured, or it was a major collision that caused major damage, you could see an insurance increase of 20-25% or more, even up to 90%. California, Delaware, and Massachusetts are typically on the high end with the biggest rate increases after an accident. Maryland, Mississippi, North Dakota, and West Virginia are usually on the lower end.
Because companies and situations differ so significantly, it’s difficult to say exactly how much your specific rate will go up after an accident. Depending on the coverage you have and how much your rate was prior to the accident, as well as the severity of the claim, you could see an increase as low as $10 per month or as high as $800+ per month. Your annual premium could increase a few hundred to several thousand dollars.
You are much more likely to see a premium increase if you cause an accident or are in a major collision. When insurance companies determine your rates, one of the biggest things they look at is your driving record. A poor driving history, filing multiple claims, or being involved in multiple accidents means you represent a higher risk for insurance companies, and your rates will likely increase.
Once you file a claim, your rate will be affected when your insurance policy comes up for renewal, which happens once per year. However, depending on the severity of the accident or violation, insurers can raise your premiums mid-year and you will see the increase on your next statement or bill.
If you’re in an auto accident, talk to your insurance agent or company to learn if there are ways you can lower your premium. For example, there could be an additional discount you can qualify for. Now may also be a good time to go insurance shopping—quote different insurers and understand if there are cheaper options out there.