You had a car accident, and you needed to file a claim through your insurance company. Many start to worry about whether their car insurance rates will rise. Whether you caused the accident or someone else caused the accident and you had to use uninsured motorist or underinsured motorist coverage to help cover the cost of repairing your vehicle or managing other expenses associated with your accident, it is understandable to worry.
You used your insurance as you should have. You need that financial assistance to help cover the costs you faced after your accident. Still, that increase in your insurance rates hangs over your head.
That said, how much can you expect your car insurance to go up after an accident?
Average Increases in Car Insurance After an Accident
How much your insurance will go up after an accident depends on a variety of factors. Across the nation, however, the average rate increase after an at-fault accident hovers around 41 percent. In around 19 states, insurance jumps by 50 percent or more following an accident. And in Texas, Louisiana, and California, you can expect your rates to increase by more than $1,300 per year when you get into an accident.
Those rate increases can feel astronomical—and may help explain why an estimated 12.6 percent of drivers do not carry auto insurance. However, several factors may influence how much your rates go up after a car accident.
What Influences Rate Increases After a Car Accident?
After an accident, you may worry about the rate increase you may face from your car insurance company. But in certain cases, you have to worry less than others, such as if you were not at fault for the accident. Several factors can contribute heavily to the rate increases you can expect to receive following a serious accident.
#1. The State You Live In
Many states have lower rates than others. In South Dakota, for example, you can expect to see just a 32 percent increase in your insurance after an accident. In California, on the other hand, you may see your car insurance rates jump as much as 76 percent. One major difference may come from the insurance offered by those states, including the states’ minimum requirements for liability insurance and whether the state requires you to carry bodily injury protection insurance.
#2. Your Car Insurance Company
Some car insurance companies will set considerably higher rate jumps than others after an accident. While some car insurance companies will not increase your rates at all after a single accident, especially if you have an otherwise clean driving record, others will start increasing your insurance as soon as you have a single accident. Make sure you talk to your auto insurance provider after you get into an accident and learn more about their policies and how they may impact your rates after an accident so that you do not end up surprised when a major bill comes through.
#3. The Extent of the Damage
How much damage happened in your car accident, including to both persons and property? If you caused a severe accident that resulted in a claim for the maximums allowed on your policy, you may find that your rates increase much more than if you caused a minor fender bender. If you caused a relatively minimal amount of damage, some insurance companies will not raise your rates at all.
#4. Your Driving Record
If you have a relatively clean driving record, which your insurance company has, the insurance company likely considers you a lower-level risk, even after one accident. The average driver has just one severe car accident every eighteen years. If you have successfully kept your record clean for longer than that, you may not have to worry about your rates going up considerably. If they do go up, they will likely go up less than for younger drivers. On the other hand, if you have a record that includes several tickets and accidents, you may find that your rates go up much more.
#5. Your History with the Company
Insurance companies may show preference to people who have been loyal customers, particularly people who have not caused accidents in the past. If you have a strong history with the company that shows that you pay your bills on time, do not cause regular accidents, and have maintained your policy for a long time, you may notice that your rates do not increase as much as someone who has only recently taken out a policy with the company. On the other hand, if you have a habit of jumping from insurance company to insurance company, or you only recently took out a policy with your current insurance company, you may notice your rates to be higher.
If you have multiple vehicles with the company, you may find that your rates do not increase as much as you might have anticipated.
#6. Who Caused the Accident
You may need to use your insurance for a variety of reasons. Of course, you might use your insurance to cover an accident that you caused. Your insurance could have to pay out for damages to the other driver’s vehicle, injuries suffered by the other driver, and, depending on your coverage, the damage to your vehicle and for your injuries.
If you have MedPay insurance, which helps provide some coverage for medical costs immediately after your accident, your insurance company may have to pay out for your immediate medical bills. If you caused the accident that led to the need to use that insurance, you may see your rates go up considerably.
On the other hand, you may have needed to use your insurance because another driver caused an accident, but did not have adequate insurance. You might, for example, use your insurance if the driver who caused your accident does not have car insurance at all. If you carry underinsured motorist coverage, and another driver causes an accident but does not have adequate insurance coverage, you may need to use your policy to help cover the additional costs associated with the repair of your vehicle. In that case, you may not see as significant an increase in your insurance rates. Some insurance companies may not raise your rates at all after an accident that you did not cause, even if you had to use your insurance.
If you did not have to use your insurance at all after an accident caused by another driver, you may not notice any rate increase. Most companies will not penalize you for an accident caused by another driver.
How Can You Decrease the Insurance Rates You Have to Pay After an Accident?
The first insurance bill after an accident can leave you reeling. Whether or not you find yourself facing a cost you might have not been prepared for, you can take several steps to help decrease your insurance rates.
1. Talk to your insurance provider.
As a first step, call and talk to your insurance provider. Often, the customer service representative can offer suggestions that may help you moderate your rate increase. The insurance provider can also help you better understand the increase in your insurance rates after an accident.
Keep in mind that an increase in your insurance rates after an accident is not necessarily punishment for getting into an accident. Your insurance company bases your rates on the risk you represent.
For example, teenage drivers will usually have much higher premiums than older drivers with more experience on the road. If you have full-coverage insurance on an expensive vehicle, which could prove costly to repair or replace, you will pay more in insurance coverage than a driver who puts full-coverage insurance on an older vehicle. After you show that you drive in a way that increases your risk of an accident, your insurance company considers you a higher risk and may require you to pay more as a result.
2. Show evidence that you did not cause the accident.
Often, insurance companies base your rate increase on the party that caused the accident. If you want to avoid a burdensome increase, you may want to fight to prove that you did not cause or contribute to your car accident.
Even police reports can contain incorrect information. You may discover that the police officer misunderstood your statement or the other driver’s statement. As a result, the report might have mistaken what led to the accident and indicated that you caused it, even if you did nothing to cause or contribute to the accident.
Talk to a lawyer before your rates jump. If you know you did not cause the accident, an attorney may be able to help you prove it, which could help you avoid those expensive rate increases and the other consequences that may follow an at-fault car accident.
3. Take a look at your current coverage.
If you had to use your car insurance to cover the damage associated with an accident, you may already have a good idea of exactly how much benefit that coverage offers. However, you may also have discovered that your current coverage offers more protection than you really need, or find that you cannot afford your current car insurance coverage at the new rate. Talk to your insurance agent about types of coverage you might remove to decrease your rates until your car insurance comes back down.
4. Shop around.
Dropping your insurance company immediately after an accident might not offer you the best chance of decreasing your rates, but not every insurance company will offer the same increase in rates that yours did. If you feel that your rates went unnecessarily high after an accident, talk to other insurance providers to get a better idea of what they can offer and whether they may provide more reasonable rates. You may find that a different car insurance provider can offer you better rates overall.
5. Take a safe driving class.
You may need to take a safe driving class to help remove points from your license or avoid other penalties. Sometimes, your insurance company may also provide a discount for drivers who take a safe driving course. Your insurance company may also offer a specific course or exam you can complete for a discount on your insurance rates.
6. Use your insurance provider’s app.
Many insurance companies now use apps that track driving behavior. Those apps can tell when you brake hard, speed, or abruptly change lanes. They likely also note cell phone use in the vehicle, since they connect to your phone when you get into the car.
Those apps can provide a better look at your overall driving behaviors, and many insurance providers offer a discount for users who install and use those apps. You may not completely remove the rate increase associated with your accident, but your app use can help decrease the high insurance rates you may find yourself paying.
7. Keep your driving record clean.
On average, a car accident claim will stay on your record for three to five years—though some states may keep that record longer. If you keep your driving record clean after the accident, you will likely notice that your insurance rates start to decrease again. Make sure you get back in touch with your insurance provider after the accident falls off your record, especially if you don’t see a corresponding decrease in your rates around that time.
After an accident, you may find yourself facing penalties. If you caused the accident, the increase in your insurance rates can cause a great deal of financial strain. If you believe the police assigned you liability for an accident that you did not cause, an attorney can help you prove who actually caused your accident and, in many cases, avoid expensive rate increases. Contact an attorney as soon after your accident as possible.
