How much will my insurance go up after an accident?

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On average, your rates will increase about 26% to 32% after an accident, based on Insure.com’s expert data analysis. That’s about $360 to $460 more a year.

But many factors come into play to determine exactly how much insurance goes up after an accident, including your driving record and which insurance company you have.

Surcharges for accidents explained

When shopping for the best car insurance, drivers choose mainly based on price, service, and reputation. But one element that’s often overlooked is a company’s “surcharge schedule” — a predetermined premium increase that’s charged if you cause a car accident.

Let’s say you had a spotless driving record for the past 15 years. Last month, you caused an accident. Now there’s a claim on your car insurance to pay for damages. You suspect your rates will go up at renewal time, but what’s a standard increase after just one accident?

There are huge surcharge amount differences depending on the company. Some insurance companies even waive your first accident or first crash in years — or a crash that causes little damage.

Pete Giancola, a State Farm agent in the Minneapolis – St. Paul Minnesota area, says it’s critical to take accident surcharges into account when deciding what insurance policy is best for you.

Insurance companies decide on a policy’s surcharge after an accident. As part of the normal filing process with state insurance departments, car insurance companies provide rate information about surcharges. Even if a state approves the surcharges, it may investigate the surcharge if the state receives consumer complaints. In that case, the state will review whether the surcharge is against public policy.

You can find out surcharge information on insurance company’s surcharge schedule. The document includes points and percentages, and you often have to do your own math to figure out increases. In some states, insurance companies are legally required to give you a copy of the surcharge schedule.

Having this information will allow you to see really what’s the best deal. Why? Because an auto insurance company may offer a bargain rate, but implements a high surcharge if you’re involved in an accident. “Some companies offer cheaper policies, but God forbid you have an accident,” says Giancola.

How much car insurance rates go up after an accident in your state

The increase depends on many factors. You may see premium increases above 40% depending on the situation. Insure.com recently investigated the topic and found that the average car insurance rate increases for one at-fault accident varies greatly by state. The biggest rate increases according to the analysis are California (92%), Delaware (78%), and Massachusetts (72%). Those are on the high end. Most states are much less and closer to 20%or 30%. You can find the average increase for your state by entering it in the search field in the table below.

Surcharges vary by state and insurance company, and some penalize you for moving violations while others only on “chargeable accidents.” For instance, State Farm increases your premium for any “chargeable” accident — meaning any accident in which the company pays more than their threshold of $750 in liability for no and at-fault claims combined.

However, if the accident is caused by a new driver who already receives a surcharge for being inexperienced, there could be no additional surcharge for the first accident.

The companies will always figure the surcharge based on the premium paid on the vehicle before an at-fault accident. Keep in mind that your location, age, driving record, type of vehicle, amounts of coverage, as well as the “loss experience” (meaning claims handled off of your policy) of drivers similar to you affect the percentage increase of your insurance premiums. In most states, insurers also factor in credit rating.

Which claims increase your rates the most?

Bodily injury claims hike rates more than property damage claims, by just a bit, on average.

• Average rate increase for bodily injury claim: 32%
• Average rate for property damage claim over $2,000: 31%

The following moving violations hike rates even more than accidents. Here is how much more your rate increases compared to that of an accident claim:

• DUI: 47% more than an accident claim
• Reckless driving: 41% more
• Two speeding tickets within 12 months: 11% more

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After-accident rate increases not exactly a science

You might find yourself getting double- or triple-whammied depending on your circumstances. If you’ve made a claim and bought a more expensive car before renewal time, you’ll likely see a significant increase — perhaps as much as 100%. At renewal time, your insurer will review your payment, claim, driving and policy change history to determine your risk level.

Remember, too, that circumstances can work in your favor at times. If you turn 40 and enter a lower-risk category or if you buy a car that’s less expensive to insure, your savings might help offset any increase caused by an accident.

State Farm isn’t the only insurance company with accident forgiveness

Some car insurance companies give their customers a one-time “get out of jail free” pass. When you make a claim on your first at-fault accident, you might not see any increase in your premium at renewal time. This practice — sometimes known as “accident forgiveness” — is not industry-wide, but is offered by many auto insurance companies. Not all states allow insurers to offer accident forgiveness, for example California’s Proposition 103 prohibits offering such a program as it may cost you a higher premium to have this perk as part of your policy.

Accident forgiveness is included in your policy at no charge from some insurers and is rewarded after a certain time period, generally three to five years, while others offer it as a purchased add-on feature—meaning you pay a higher rate in exchange for the benefit.

Companies that forgive first-time accidents often require that you fit a certain profile to escape a rate increase after an incident.

Here are some examples:

• State Farm has a program that forgives the first accident for its policyholders who have been with the company, accident-free for three consecutive years, or as the company says, “at least three continuous years without a chargeable accident.”
• USAA members who keep an accident-free record for at least five years will receive a surcharge waiver for one at-fault accident per policy. If you haven’t been with the company that long, you can buy accident forgiveness in many states.
• Geico’s free accident forgiveness applies to drivers who have been accident-free for five years or more, over the age of 21. If you have a clean record and are an experienced driver, you can buy “upgraded” accident forgiveness when you buy a policy or upon renewal of your coverage. Once used for an accident, the premium charge will be removed at the next renewal. Geico will forgive the first accident for each driver on the policy. If you have multiple drivers on your policy, any of the eligible drivers may use this benefit once, which differs from other insurers who limit it to one per policy.
• Liberty Mutual offers accident forgiveness for those who have no accidents or violations for five years. Even if you had coverage with another insurer, your zero accident record still counts toward the five years.

Progressive has two types of accident forgiveness plans, “small” and “large.” Here’s how they work:

• Small — In most states, new policyholders benefit as soon as their coverage starts. With Small Accident Forgiveness, your insurance rate stays the same if your total claim is less than or equal to $500.
• Large — Available in most states as part of the Loyalty Rewards program, Large Accident Forgiveness rewards those who remain with Progressive for at least five years and who stay accident-free and violation-free for a minimum of three consecutive years. With Large Accident Forgiveness, your rates won’t increase if you’re at fault in an accident, even if the total claim exceeds $500.

The good news is that if you’re slapped with a surcharge, it’s not forever. Your surcharge will drop off after a determined length of time, which varies by state. Some states may remove surcharges after three years, while another may fall off after five years.

How to decrease your rates

If you’re hit with a surcharge after an accident, you may see your rates skyrocket, but there are ways to offset that increase. Here are three ways:

• Increase your deductible. Giancola says people should carry a deductible that makes sense for them. For instance, a deductible less than $500 may entice the person to use their coverage. Plus, it’s a good idea to set aside money for your deductible in case you end up needing to file a claim.
• Improve your credit score. In nearly every state, credit rating places a part in rates. People with lower credit scores are considered a higher risk, so insurers charge higher rates. How much higher? Giancola says people with poor credit scores (600 or less) may pay double for auto insurance than they would if they had an excellent credit score.
• Don’t file many claims. Every time you file a claim, your rates may increase, so you want to be careful about filing too many claims. “Make certain not to place frivolous claims for small items you could spend out of pocket,” said Giancola.

Of course, it should also go without saying that preventing future car accidents are also a great way to make sure your rates don’t skyrocket. Stay focused on the road and keep watch of other drivers’ actions while you’re operating a motor vehicle. Driving defensively can go a long way in reducing crashes.

Shop for auto insurance to get the best rates

Knowing how much you’ll pay if you’re involved in an accident is an important piece of information that many consumers don’t think about when shopping for auto insurance. While a car insurance policy may look like a bargain initially, a high surcharge level could send your rate through the roof after an accident.

Consumers often don’t dig into that kind of information — partly because it’s not readily available. You often have to request the surcharge schedule from the insurer or your insurance agent.

However, knowing how much your insurance may rise if you get into an accident is an important piece of the auto insurance puzzle. Make sure to find out how much your insurance may rise if you’re in an accident before choosing an auto insurance policy.

Penny Gusner

Contributor

 

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Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s.