Auto Insurance Claims: What's The Cost Impact?

Car insurance rates typically increase after an accident, but the amount varies depending on several factors. These include the type of accident, the driver's state, their insurance provider, and their previous driving record. On average, car insurance rates can go up by around $800 to $872 per year following an at-fault accident, but rates may increase by a smaller amount or not at all in some cases. Accidents typically stay on a driver's insurance record for three to five years, during which time insurance companies may charge higher rates.

At-fault accidents

Young drivers may experience the highest increases after an at-fault accident, as insurers typically view them as a high-risk group. The average annual premium for full coverage increases by $840 after an at-fault accident. An at-fault accident can impact your insurance rates for up to six years, as this is how long it stays on your driving record.

In some states, insurance companies are prohibited from increasing rates after a no-fault accident. For example, in California and Oklahoma, insurers cannot increase rates if the driver was not at fault. However, in other states, your insurance rates may still increase after a no-fault accident, especially if you have made multiple claims within a set period.

Accident forgiveness programs can help to waive the surcharge after an at-fault accident, but these vary by state and insurance provider and usually come at an additional cost.

No-fault accidents

In no-fault states, drivers must carry personal injury protection (PIP) insurance, which pays for medical expenses after a car accident, regardless of who was at fault. This saves time and energy as drivers do not need to file a claim through the other driver's insurance. However, PIP coverage is costly, and most states that require it have premium rates above the national average.

If you live in a no-fault state, your insurance company will typically cover your damages, but you may still be able to sue the other driver in certain situations, such as if the accident caused \"significant\" injury as defined by state law, or if the accident resulted in medical bills above a certain threshold.

It's important to note that even if you weren't at fault, your insurance rate could increase by hundreds of dollars. This is because insurance companies calculate premiums based on risk, and any claim can impact your premium. Filing multiple claims within a short period can lead to a higher risk assessment and, consequently, higher rates.

Comprehensive claims

Comprehensive insurance is an optional coverage that protects your vehicle from damage caused by unexpected events that are not collisions. This includes theft, vandalism, glass and windshield damage, fire, accidents with animals, weather, or other acts of nature. Lenders may require you to carry comprehensive insurance when you finance or lease a vehicle.

Comprehensive insurance claims tend to cost much less than collision or liability insurance claims. Insurance providers consider comprehensive claims to be outside the driver's control. On average, a comprehensive claim will raise your premium by $5 per month, or $36 over a standard six-month policy. Filing multiple comprehensive claims will increase your insurance rates by $82 over a standard six-month policy, on average.

After a comprehensive claim, you can save money on your insurance by dropping extra coverage, choosing a higher deductible, considering usage-based insurance, and relying on your coverage sparingly.

Accident forgiveness

To be eligible for accident forgiveness, you typically need to have a clean driving record for a certain number of years. For example, Liberty Mutual requires five years of accident-free driving, while Progressive offers Large Accident Forgiveness to customers who have been with the company for at least five years and have remained accident and violation-free during that time.

High-risk drivers

High-risk insurance is often expensive, but there are ways to cut costs. For example, taking a defensive driving course, raising your deductible, improving your credit score, or asking about low-mileage discounts can help reduce premiums.

If a high-risk driver cannot find insurance on the open market, they may have to buy a policy from their state's assigned risk pool, which ensures that everyone can meet basic insurance requirements.

Frequently asked questions