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A car accident can last only a few moments, but the financial consequences can last for years. Even if you have a minor accident with no personal injury or serious car damage, your insurance premiums can go up. In some states, causing a car accident can affect your rates for up to five years.
If you’ve got a pristine driving history and are causing an accident, here’s some bad news: According to Forbes Advisor’s analysis, the national average for drivers with a clean history causing an accident is 41%.
But not every car accident leads to a rate increase. And if you’re affected by higher rates, there are ways to reduce the financial impact.
How does a car accident affect insurance?
If you are found culpable in a car accident, you will most likely see an increase in your car insurance rates at the time of the renewal. This is because a culpable accident is considered a “chargeable” accident, which generally means that you were more than 50% to blame and that the accident was caused by one of the following:
- Damage to someone else’s property, e.g. B. another car or a fence
- Injury or death to another person
The motor insurance portion of your policy covers property damage or personal injury. If you make use of your liability insurance, this can lead to a “surcharge”, ie the actual tariff increase after a chargeable car accident.
The surcharge starts when you renew your policy (an insurer cannot charge you in the middle of the contract period).
The overall severity of the car accident and the resulting cost of an insurance claim can affect your rates. A small fender bender in a parking lot usually doesn’t have the same effects as a serious accident. In certain states, your insurer will not increase your rates if the claim is less than a certain dollar amount. For example, if you cause a car accident in Massachusetts, you will not be awarded a surcharge for claims under $ 1,000.
The average car insurance rate increases after an accident
Will my insurance rates rise if I did not cause the accident?
Car insurance rates usually only go up when you cause a car accident that damages or injures other people. Here are some examples of non-toll car accidents:
- Your car was hit by a hit and run in an accident
- Your car was legally parked when it was damaged
- Your car was hit in the rear by another vehicle and you have not been convicted of a traffic violation related to the accident
Check out more examples of car accidents that don’t increase your insurance coverage.
If you are involved in an accident, your car insurance may require proof that you are not at fault. Here are some examples of documents you can put together:
- A police report on the accident
- A statement from the other driver’s insurance company accepting the fault
- Written declaration from another driver under threat of perjury attesting to the fault
- A legal document showing that you have been reimbursed for the accident damage
Even accidents that are covered by fully comprehensive insurance usually do not lead to a tariff increase. These include collisions with animals and damage from falling or flying objects (such as gravel or road debris).
However, extensive damage is recorded in your damage history. Insurers generally assume that drivers with a history of damage are more likely to make future claims, which can lead to higher car insurance premiums.
How long will an accident affect my car insurance rates?
The length of time a fault accident will affect your auto insurance rates depends on your insurance company and state, but is generally around three to five years. For example, states like New York and Texas allow insurance companies to charge surcharges only for accidents in the past three years, but states like Massachusetts allow surcharges for five years.
Some states and insurers will lower the cost of the surcharge on an insurance policy for each year that you drive without incident (such as when you are driving).
How can I shorten my car insurance after an accident?
If you are faced with a surcharge due to a car accident, here are some ways to reduce your car insurance bill:
- Ask about discounts. It might seem awkward to ask your insurance company about possible discounts after a car accident, but you may still be able to qualify for cheap car insurance. For example, you could save a few dollars on your bill by going paperless, or get a lower rate if you no longer commute every day.
- Put your driving safety to the test. The best way to recover from an accident is to practice driving safely. If you think you are a good driver, consider usage-based insurance. These programs track your driving actions and generate a score and tips for improving your driving behavior. If you do well, you can get a discount.
- Shopping spree. If you are dissatisfied with the prices and / or service from your current insurer, you should compare car insurance offers. One of the best ways to save money on insurance is through shopping. While an accident surcharge will follow you to new auto insurance, these may still top your old company’s rates.
Increase in car insurance rate by company
Frequently asked questions about car insurance after an accident
How can I get cheaper insurance after a car accident?
If you cause a car accident, there is a chance that you will see an increase in car insurance the next time you renew. But that doesn’t mean you’re stuck with these prices. Tariffs vary widely between insurers for the same coverage, so you can pay less elsewhere. You can start the process by comparing car insurance quotes from different companies.
Will my car insurance rates go up if I’m forgiven for accidents?
If you cause an accident and are forgiven, your insurer will not increase your car insurance rates. However, there are certain rules for accident forgiveness that vary from company to company. For example, your insurer only “forgives” an accident every three years. If you cause two accidents during this period, your rates will go up.
Note that forgiveness only applies to your insurance company. If you cause an accident, it will still be listed in your driving history, which can affect your car insurance rates if you switch car insurance company. Your state could also assign points to your driver’s license.
Can the car insurance rates be increased if you are not at fault in an accident?
If 100% of a car accident is caused by someone else, you shouldn’t see a rate increase. For example, if you are run over by another driver at a traffic light, you will not be considered at fault.
States differ in how they deal with partial debt. For example, in California, your compensation will be offset against your share of the debt. In Arkansas, you cannot get compensation if you owed more than 50%.