Auto Insurance Premiums: The Post-Accident Hike

Car insurance rates typically increase after an accident, with the exact amount depending on factors like the type of accident, the driver's age, location, and insurer. An at-fault accident can increase your auto insurance rates for at least three years, and the national average rate increase is 45% after an accident with property damage and 47% for accidents resulting in injuries. Even if you are not at fault, your insurance rates may still increase, as insurers may perceive you as a high-risk driver.

How much do auto insurance rates increase after an accident?

The amount that auto insurance rates increase after an accident depends on a variety of factors, including the driver's age, location, insurance provider, driving record, claims history, and the severity of the accident. Young drivers may experience the highest increases after an accident, as insurers typically view them as a high-risk group.

On average, car insurance rates increase by 45% after an accident with property damage and 47% after an accident resulting in injuries. However, the increase can range from 21% to 77%, depending on the insurance company. For example, State Farm had the lowest average rate hike of 21% for at-fault accidents with property damage, while Geico had the highest at 73%.

The increase in insurance rates after an accident also varies by state. Drivers in Wyoming experience the lowest average increase of 31% after an accident, while North Carolina drivers face the highest average increase of 79% for property damage accidents.

It's important to note that insurance rates may still increase even if you are not at fault for the accident, depending on your state and insurance company. Additionally, comprehensive claims, such as collisions with animals or damage caused by falling objects, may not result in a rate increase but will be recorded in your claims history, which can impact future premiums.

What factors influence insurance rate increases after an accident?

Several factors influence insurance rate increases after an accident. The most significant factor is whether the insured individual is at fault for the accident. If they are, their insurance rates are likely to increase substantially as they are deemed a high-risk driver. The severity of the accident also plays a role, with more severe accidents resulting in higher increases. The insured individual's driving history is also taken into account, with those who have been in multiple accidents within a set period facing larger increases.

Other factors that influence insurance rate increases include the insured individual's location, age, gender, and coverage type. The insurance provider's policies and the state's laws also impact the rate increase. For example, some states don't allow insurers to increase rates if the accident wasn't the insured individual's fault.

It's worth noting that insurance rates typically increase after an at-fault accident because insurance companies calculate premiums based on risk. Statistically, drivers involved in accidents are more likely to be involved in future accidents, so insurance companies adjust their premiums to reflect this higher risk.

Which insurance companies offer the best rates after an accident?

The best insurance rates after an accident will depend on a variety of factors, including your age, location, driving history, and the type of coverage you need. Here are some of the insurance companies that offer competitive rates for drivers who have been in an accident:

• State Farm: State Farm has the cheapest rates after an accident compared to other national companies. The average cost of full coverage insurance from State Farm is $154 per month after an at-fault accident, with rates increasing by around 24% after an accident. State Farm also has high customer satisfaction scores and fewer complaints than similar companies.
• Erie: Erie is the best regional insurance company for drivers who have been in an accident. Full coverage from Erie costs $133 per month after an at-fault accident. Erie also has the most affordable rates for drivers with a ticket or accident on their record and increases rates the least after a ticket or accident. However, Erie is only available in 12 states and Washington, D.C.
• USAA: USAA offers competitive rates for drivers with at-fault accidents and is highly rated for customer satisfaction. However, USAA insurance is only available to military members, veterans, and their families.
• Progressive: Progressive typically doesn't raise rates for your first accident claim if the total damage is less than $500. Progressive also offers accident forgiveness and has affordable rates for drivers with poor credit scores.
• Geico: Geico offers accident forgiveness for qualifying safe drivers after five years, or as a supplemental coverage option for a cost that varies by state. Geico also has competitive rates for drivers with poor credit.
• Allstate: Allstate offers accident forgiveness as part of its Gold and Platinum "Your Choice Auto" packages, which vary by state and driver. The Gold package includes one accident forgiven every three years, while the Platinum package offers unlimited accident forgiveness.
• Nationwide: Nationwide offers accident forgiveness for drivers who have been insured by the company for six continuous months. Two minor violations and two at-fault accidents in three years can be forgiven, and forgiven accidents won't increase your premium.

How can I lower my insurance rates after an accident?

Car insurance rates typically increase after an accident, especially if it's your fault. However, there are several ways to lower your insurance rates even after an accident.

Seek coverage elsewhere

Switching insurers after an accident can help you find a better price. Get prices from other auto insurance carriers at least once a year to see if you can save money. According to The Zebra, State Farm, GEICO, or USAA offer the most affordable coverage rates after an accident, depending on the state where you live. However, USAA only writes policies for current and former military members and their families.

Update your coverage

Changing the limits and terms of your auto insurance policy after an accident can also save you money. Consider increasing your deductible to achieve a lower monthly payment on your insurance premium. Ensure that you still carry at least your state's minimum required liability coverage. You can also temporarily discontinue comprehensive coverage, which pays for the cost of non-collision damage to your vehicle, such as theft, flood, or fire. However, if you lease or finance your vehicle, your contract may require you to carry this type of policy.

Go to driving school

Many insurance companies offer discounts if you complete a defensive driving or driver education course. Defensive driving classes cover road safety techniques, ways to avoid accidents, and traffic laws in your state. Some states even require insurers to provide this type of auto policy discount.

Look for discount programs

There are several common types of discounts for auto insurance customers, including safe driving discounts, membership discounts, anti-theft and safety discounts, defensive driver education discounts, paperless billing discounts, upfront and auto-payment discounts, and multiple policy discounts. After an accident, check with your agent to see if you are eligible for these or other savings programs.

Improve your credit

If you have below-average credit, your score can result in higher insurance rates in many states. Taking steps to improve your credit, such as paying bills on time and reducing your overall debt, can help you earn lower auto insurance premiums.

What is accident forgiveness and how does it work?

Accident forgiveness is an optional feature of car insurance that prevents your rates from increasing after a car accident. It can be purchased as an add-on, or you might qualify for it after several years of accident-free driving. Accident forgiveness may be offered for free by some insurers after a certain number of years, or as a reward for good driving.

Accident forgiveness only applies to your first at-fault accident, and not to subsequent ones. It also won't stop accidents from appearing on your driving record, and so may still impact your rates if you switch insurers. It's worth noting that accident forgiveness is not available in all states.

Frequently asked questions