It’s one of the oldest pieces of driving advice in the book: don’t get in an accident, or your car insurance rates will go up. And it’s true — getting in an accident, especially an at-fault accident, can incur a huge expense. But accidents happen, and if one happens to you, all is not lost — those rate hikes might not last forever, and there are some other ways you can bring your premiums down in the meantime.
How Much Does Car Insurance Increase After an Accident?
If you file an accident claim and the damage done is under a certain dollar amount, you might get away without having your rates go up at all — but you probably shouldn’t count on that happening. Chances are, your rates will go up, and possibly by a lot.
Exactly how much varies by state and insurance company — Allstate tends to be one of the more expensive companies, charging $3,842 in annual rates against a national average of $1,483. If you were at fault in the accident, you can definitely expect your rate to be higher than if the other party was at fault.
How Long Does a Rate Increase Last?
This is another area where the answer is “it depends.” The short version is, auto insurers will take a look at the past several years of your driving record when determining your premium, so you can expect it to be a black mark on your record for a while. It may also depend on whether you were at fault and/or how costly the damage was.
What If It Wasn’t Your Fault?
Though it may not seem fair, your rates could quite possibly go up after an accident even if it wasn’t your fault. Whether or not you’ll see a hike in premiums depends on which state you live in — some states are “no-fault” states, which means insurance companies cover damage regardless of who is at fault. Other states have rules against raising premiums for no-fault drivers.
Accident Forgiveness and How It Can Help You
Depending on where you live, you may be able to purchase accident forgiveness coverage. Accident forigveness is basically an addition to your policy which will prevent your insurance rates from increasing after an accident. On one hand, this can save you a lot of money if you get in a major mishap, considering how much rates go up normally. On the other, however, you will be paying more for your auto insurance, and the trade-off might not be entirely worth it.
Not all states or insurance companies offer accident forgiveness, and you may have to meet certain qualifications. You can also use it only once in a three- to five-year period, meaning you’re out of luck if you get in two accidents within that time frame. So while accident forgiveness is not a catch-all, it might be worth adding onto your existing policy.
Reassessing Your Risk
Rate hikes won’t last forever after an accident — at some point, your insurer will reassess your risk after an accident and determine whether or not it’s time to bring those rates back down. This isn’t a uniform procedure among insurance companies — different companies use different criteria to assess your risk after an accident, and so both rate increases and reassessments will vary.
Kristine Lee at The Zebra has some hard data on this — Progressive, for instance, has one of the biggest rate hikes after an at-fault accident, while Nationwide has one of the smallest. While it might be challenging to find the best cheap car insurance for when you have an at-fault accident, it’s worth doing some shopping around and comparing quotes.
Lowering Car Insurance Premiums After an Accident
If you have gotten into a car accident and seen a rate increase — or if you just want to bring your premiums down where you can — there are a few ways you can pay a little less for auto insurance.
• Take a defensive driving course, or install anti-theft or safety gear on your car. All three will reduce your risk factor with insurers.
• Improve your credit rating if you can. While some states have banned the use of credit rating when it comes to determining insurance premiums, most states still look at it. Bringing your score up will help bring those premiums down.
• It bears mentioning twice: shop around and compare quotes! You might be surprised at how much cheaper your auto insurance could be, and there are online tools out there to make it easy.
• Ask about discounts. Most insurers have a whole assortment of discounts, for things like low mileage, good grades, certain professions, and more.
• Last but not least, do what you can to avoid any other traffic violations! The cleaner your driving record, the lower your premiums will be in general.