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UPDATED: Mar 13, 2020
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Car insurance is based on the risk of you filing a future claim and after a car accident you will certainly fall out of the preferred risk level for most car insurance companies. Some auto insurers will only raise premiums if the accident was your fault but even this is becoming a little less common today.
States with no fault car insurance laws have many advantages for reducing your risk to litigation and a quicker claims process but since nobody was “at-fault” car insurance companies penalize both drivers in terms of premiums.
How much will my rates increase after a car accident?
This will vary depending on the type of claim submitted, your car insurance company and where you live. For many drivers involved in a single car accident your rates really do not go up but your good driver discount goes away – which leads to higher premiums. While some auto insurers have single accident forgiveness this also can depend on the circumstances of your accident.
While there is no percentage or dollar amount anyone can forecast as an automatic increase to car insurance rates after a car accident its not uncommon to see rates rise 10 or 20%.
Will car insurance rates always rise after a car accident?
No, but this can be due to simple luck or a car insurance company providing a waiver for a single accident. It is really a case by case basis after a claim is filed. Car insurance policies are generally reviewed every six or 112 months at renewal time so it’s unlikely to see any change in premiums mid-term.
How can I avoid car insurance rates from rising?
The best answer would be to avoid an accident but obviously this can not always be prevented. There are a number of ways you can reduce your exposure to possible higher rates from a car accident including:
- Choose a car insurance company who provides a single accident waiver
- Purchase a 12 month policy term (this will at least slow the increase from coming)
- Only file a claim when you need to
Not all car accidents are worth filing a claim for. If your damages are lower than your deductible and there is no risk of litigation it’s probably worth considering not filing a claim and simply paying the repair cost yourself. Some drivers avoid filing a claim unless the damages are substantial but this is entirely a personal decision you need to make on your own.
Can a car insurance company change my rates mid-term?
No. You purchase car insurance for a period of time and car insurance companies can not change your premiums during this term. They can drop you or change your rates at renewal time but during the period while your policy is in force they can not alter your coverage. This is the main reason why almost all car insurance companies only offer 6-month terms.
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