Car accidents can be incredibly expensive. Not only is your vehicle damaged. You may also be injured. Plus, even a single accident can send your insurance premium skyrocketing if you are deemed to be at-fault. If you are wondering how much your auto insurance increases after an accident. Here’s what you need to know.
Factors That Impact the Increase
First, it’s important to understand that there are a number of factors that influence premium increases after an accident. This can include the circumstances surrounding the accident as well as the resulting expenses.
Here are a few factors that may cause your insurance cost increase to be higher or lower:
- Whether there was a fatality
- Hospital costs for the injured
- Whether any involved vehicles were totaled
- The full cost of car repairs
- Total cost for any resulting property damage
- Whether you’re deemed at-fault
- Why you were considered to be at-fault
- Traffic violations involved in the crash
- Whether the incident resulted in criminal convictions (vehicular homicide, DWI, DUI, etc.)
Any violation or crime that could end up on your driving record has the ability to affect your car insurance premium. This includes if they are tied to an accident while you are a policyholder.
Your driving record before the crash is also considered. Those who have a perfect driving record aside from this incident may see different price increases than someone who has had issues in the past and gets in a new accident.
Additionally, every vehicle insurance company maintains full control over their premiums. One company may use larger increases than others based on the proprietary formula it uses to determine a price for coverage.
Ultimately, there are a lot of factors in play. So premium increases can vary. However, information about averages is available.
How Much Insurance Costs Increase After an Accident
On average, auto insurance premiums appear to increase by 31 percent to 44.1 percent (depending on the data source) after an accident. That means, if your annual premium was $1,502, which is the national average. Before the accident, after a single at-fault crash, your yearly premium would hit $1,968 to $2,164.
That’s close to the average premium data for a variety of insurers for customers with at-fault accidents. Here’s a list of some of the average at-fault accident car insurance rates for major insurers:
- Allstate – $3,017
- GEICO – $1,997
- Farmers – $2,226
- State Farm – $1,617
- Progressive – $2,772
- Liberty Mutual – $2,358
- Nationwide – $2,174
What About Policies with Accident Forgiveness?
It is important to note. Not all insurers penalize customers for their first at-fault accident. An approach known as “accident forgiveness.” With Allstate and Liberty Mutual, qualifying drivers won’t see a premium increase just because they are deemed at-fault in one accident within a specific period. With Progressive, small accidents might be forgiven.
Nationwide offers accident forgiveness. But only in certain states. It only applies to a single accident on a policy. This is regardless of the number of drivers listed.
USAA has optional accident forgiveness coverage available. However, it also isn’t available in all states and does come with a charge. The charge is usually around $1 per month.
GEICO may make it available to specific drivers who reach a particular anniversary milestone with the company. A good driving record is also necessary. However, some with perfect histories may be able to purchase the coverage. Even if they haven’t hit the anniversary milestone.
Premium Increases After No-Fault or Not-At-Fault Accidents
Many people are surprised to learn that your car insurance premium can go up after any accident. Even if you aren’t responsible. Increases after no-fault or not-at-fault accidents do occur. Moreover, they tend to be smaller changes than if you’re deemed liable.
Insurance premiums are based on costs and risk. If you file a claim. The company is incurring a cost if it has to provide funds to help repair damages or handle associated expenses. Based on that alone. You can see a premium increase.
Additionally, statistics suggest that individuals who’ve made claims previously are more likely to do so in the future. This means you represent a higher amount of risk. Which is something else that can cause your premium to rise.
What to Do If Your Premium Goes Up After an Accident
If you aren’t happy with your premium after an accident, you do have options. First, you can always shop around for new coverage. Second, different insurers use different formulas to decide what to charge. So you might find better rates elsewhere.
Adjusting your coverage levels might be a good idea, too. Going from comprehensive to liability, raising your deductible, and similar options might shrink your premiums. Just keep in mind that reducing your coverage means taking on more risk personally. Plus, if you’re still paying down a car loan. Certain changes might not be options for you.
Look For A Different Car
You can also look for a different car, in some cases. Insurance rates are impacted by the vehicle itself. This includes the age and mileage of the car, the security and safety features it has. It also includes average repair costs for that make and model, and similar unique aspects of the vehicle. By choosing an option that doesn’t cost as much to insure. You can bring your premium down. However, this isn’t always a practical approach that every household can use.
Otherwise, if you don’t want to make a switch. You may need to ride it out. It takes time. But an at-fault accident won’t impact your insurance forever. As long as you drive safely for the next handful of years. Your premiums should go down.
Did you see your insurance go up after an accident? How much was the increase? Share your thoughts in the comments below.
Read More:
- What Determines Your Car Insurance Premiums Might Surprise You
- Tips on How You Can Save on Vehicle Insurance
- What Effect Does Financing a Car Have on Car Insurance?
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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