Orlando Harmon
If you've been in a car accident, you may be concerned about the impact on your auto insurance premium. While it's natural to worry about your rates going up, there are a few things to consider. Firstly, it depends on who was at fault for the accident and the circumstances surrounding it. If the other driver was at fault, their insurance should cover the cost of any damage or injuries, and your rates are unlikely to be affected. However, if you were at fault, your insurance company may raise your rates, depending on the type of accident, your insurer, and the state you live in. It's worth noting that some companies offer accident forgiveness programs, which can help prevent rate increases after certain types of accidents. Additionally, the impact of an accident on your insurance rates typically lasts for around three to five years. To find the best rates after an accident, it's recommended to shop around and compare quotes from different insurers.
| Characteristics | Values |
|---|---|
| Insurance rates increase | If you caused the accident |
| Insurance rates decrease | If you weren't at fault for the accident |
| Insurance rates may increase | If you have filed multiple claims over the years |
| Insurance rates may increase | If you had a claim-free discount prior to the accident |
| Insurance rates may increase | If you have to make an uninsured or underinsured motorist claim |
| Insurance rates may increase | If you have to make a collision claim after a hit-and-run |
| Insurance rates may increase | If the accident was partially your fault |
What You'll Learn
No-fault states
No-fault insurance laws currently exist in 12 US states. In these states, drivers are required to file claims for bodily injury with their own insurance company, regardless of who is at fault for the accident. This type of insurance is often called Personal Injury Protection (PIP) and covers medical bills and other accident-related expenses for the insured and their passengers.
In no-fault states, drivers are usually prohibited from suing the at-fault driver unless they have suffered debilitating personal injuries. The threshold for what constitutes a debilitating injury varies by state. For example, in Massachusetts, you must have damages in excess of $2,000 to file a lawsuit for bodily injury.
No-fault insurance is mandatory in certain states, while others offer it as an optional add-on to a driver's auto policy. As of November 2016, there were 18 states that required drivers to purchase no-fault/PIP coverage. However, it's important to note that these laws can change, so it's best to check with a local agent to confirm the current requirements.
One advantage of the no-fault system is that it can speed up the claims process by keeping minor injury claims out of the courtroom. Additionally, PIP coverage may cover expenses beyond medical bills, such as lost wages or childcare services, depending on the state and policy limits.
On the other hand, a disadvantage is that drivers in no-fault states typically have restricted rights to file lawsuits, and can only do so if certain severe injury conditions are met.
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Comprehensive claims
If you have comprehensive coverage and are worried about your rates going up after an accident, you can ask your insurance representative how an accident will impact your rates.
Additionally, some states, including California and Oklahoma, legally prohibit insurance companies from raising customer rates after no-fault claims.
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At-fault vs no-fault accidents
When an accident occurs, the at-fault driver is usually responsible for covering the injuries of the other driver and their passengers, typically through their liability insurance. However, this varies depending on the state and type of negligence.
At-Fault Accidents
Accidents that you cause will almost always raise your insurance rate. The exact rate increase will depend on the type of accident, your insurer, and your state. Some states may not raise your premium if the damage is below a certain dollar amount.
No-Fault Accidents
Twelve U.S. states currently have no-fault car accident laws. In these states, drivers must carry personal injury protection (PIP) insurance, which covers 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 one another's insurance. However, PIP insurance is typically more expensive than liability insurance.
Even in no-fault states, the at-fault driver's insurance usually pays for damage to the other driver's vehicle and property. Additionally, no-fault states may allow drivers who suffer severe injuries to sue the at-fault driver.
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Accident forgiveness programs
Accident forgiveness can be offered as a reward for safe driving and customer loyalty, or it can be purchased as an add-on to your policy. Some companies offer it as part of a larger package, while others allow you to buy it separately. The cost and specific benefits of accident forgiveness vary depending on the insurance company and your state.
- Allstate: Accident forgiveness is available as part of Allstate's Gold and Platinum "Your Choice Auto" packages. The Gold package offers one accident forgiven every three years, while the Platinum package provides unlimited accident forgiveness. The Platinum program also includes a diminishing deductible feature, reducing your deductible by $100 for each year of safe driving, up to a maximum of $500.
- Geico: Geico offers free accident forgiveness for qualifying safe drivers after five years. It can also be purchased as a supplemental coverage option, with the cost varying by state. One accident can be forgiven every three to five years, depending on the state.
- Progressive: Progressive offers accident forgiveness for drivers who have been continuously insured by any company for six months. Customers initially qualify for forgiveness of claims totaling less than $500. After five years of being accident and claim-free, customers may qualify for forgiveness of higher-cost claims.
- State Farm: State Farm provides accident forgiveness for customers after nine years of safe driving, forgiving one accident every nine years.
- Liberty Mutual: Liberty Mutual offers free accident forgiveness to customers who have gone five years without a moving violation or accident. They forgive one accident every five years and allow customers to keep their safe driver discount.
- Farmers: Farmers Insurance offers accident forgiveness as a policy add-on, and the cost varies by driver and state. They forgive one accident every three years and allow unlimited fender benders (low-cost accidents under a certain threshold).
It's important to note that accident forgiveness programs have different guidelines and requirements for each insurance provider, and availability may vary by state. Additionally, accident forgiveness only applies to your first at-fault accident and not subsequent ones. It's always a good idea to review the specific terms and conditions of the program before enrolling.
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How long an accident stays on your record
The length of time an accident stays on your record depends on several factors, including the state you live in, the nature and severity of the incident, and your insurance provider's protocols.
In general, accidents remain on your driving record for three to five years. However, this duration can vary significantly, ranging from three years for minor accidents to up to eight years for hit-and-run accidents, and even ten years or more for drug and alcohol-related convictions or vehicular homicide.
Your state's Department of Motor Vehicles (DMV) maintains driving records, and each state has different data retention laws that dictate how long accidents stay on your record. For example, in New York, accidents typically remain on your record for about four years, while in California, most accidents and minor violations stay on your record for three years, and DUI convictions remain for ten years.
It's important to note that insurance companies typically consider the last three to five years of your driving record when calculating your insurance rates. So, even if an accident is still technically on your record, it may not impact your insurance rates after a certain period.
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Frequently asked questions
Your insurance rates will probably not go up if the accident was caused by another driver. The other driver's insurance should cover any damage or injuries sustained in an accident that was not your fault. However, some companies may slightly increase your rates, especially if you have filed multiple claims over a short period.
If you live in one of the 38 US states with fault laws, the other driver's insurance policy will compensate you for the costs of an accident in which they were at fault. You can file a claim with their insurance company for auto accident injury expenses, as well as damage to your vehicle and personal property.
In no-fault states, everyone involved in an accident files a claim with their own insurer for injuries. As a result, your insurance rates may increase after an accident, regardless of who was at fault. However, some states, including California and Oklahoma, prohibit insurance companies from raising customer rates after no-fault claims.
If the other driver is uninsured or underinsured, you may need to file a claim with your own insurance company. In this case, your rate will likely remain the same. You can also seek financial protection through an uninsured motorist property damage (UMPD) policy, which is less costly than collision coverage.
