AutoInsurance.com
Published: March 7, 2012Last updated: July 18, 2022

The Cost of Auto Insurance With Accidents

How does your insurance cost change after an accident?

No one ever expects to get into a car accident, but an at-fault accident can affect your auto insurance rates for years. On average, premiums rise by 42 percent after an at-fault accident, but there are ways you can decrease the effects of an accident on your premium.

Of course, since auto insurance rates are based on driving history, expect to pay more for car insurance if you have a traffic violation. If you were involved in an accident that you caused, expect to pay even more for car insurance. Still, you’ll be able to find everything from liability coverage only to full coverage car insurance from the following providers. To find out your exact premium, get an insurance quote today.

How Does an Accident Affect Your Insurance Rates?

When you cause an accident, your insurer will see you as having a higher risk of getting into another accident and therefore costing it even more money. So, to protect itself, the company will increase your rates1.

Company Average annual premium before an accident Average annual premium after an at-fault accident Average percentage increase
Allstate $2,392 $3,424 43%
Erie $1,316 $1,629 24%
Farmers $1,853 $2,678 44%
GEICO $1,468 $2,256 54%
Nationwide $1,466 $2,173 48%
Progressive $1,786 $2,834 59%
State Farm $1,445 $1,814 26%
Travelers $1,437 $1,979 38%
USAA $1,226 $1,742 42%

FYI

Erie Insurance will increase your rate the least after an accident, on average.

What Determines the Amount of the Increase?

  • How serious the accident was: Typically, a more serious accident will result in a greater increase.
  • Who caused the accident: If you were the person at fault for the accident, you can expect to see an increase.
  • Which state you live in: Each state has different laws governing how an insurance company can set rates. Check with your state’s insurance regulatory agency for its specific guidelines on increases.
  • Your insurance company: Each insurance company has its own formula for how to calculate risk after an at-fault accident, which is why shopping around after an accident can be beneficial2.

How Long Does an Accident Affect Your Rates?

An accident could affect your rates for three years.

TIP

Check your state laws to see how long an accident stays on your driving record and thus increases your car insurance rates.

What if You Didn’t Cause the Accident?

States have different laws on how to calculate who is at fault for an accident. In certain states, your rates may increase slightly even if you didn’t cause the accident.

However, these major insurers offer extra coverage called accident forgiveness3:

  • American Family
  • Amica (if you’ve had no accidents within the past three years)
  • Clearcover
  • Direct Auto
  • Erie
  • Farmers
  • GEICO
  • Infinity
  • Liberty Mutual
  • Mercury
  • Nationwide
  • Plymouth Rock (if you’ve had no claims in the past five years and live in Connecticut, New Jersey, or Pennsylvania)
  • State Farm

If you qualify and add this coverage to your policy, your premium won’t increase after your first accident. (Note: Accident forgiveness is not available from every insurance company, and it is not available for California residents.)

What Affects Your Rates Other Than an Accident?

  • Extra coverages on your policy: The more optional coverages you add, the higher your premium will be.
  • Deductible: Typically, a higher deductible will mean a lower premium. However, when you file a claim, a high deductible means you’ll have to pay more before your insurer will kick in funds.
  • Type of vehicle: If you drive a safer car, then your rates will be lower because the risk of damage and injury is lower. However, if your car is popular with car thieves, your rates will be higher because your insurer knows that it is more likely to have to pay a comprehensive claim for car theft.
  • Annual mileage: The more miles you drive, the more likely you are to get into an accident.

How Can You Lower Your Rates After an Accident?

  • Shop around. Since each insurance company has a different calculation for risk, you may be able to find a smaller increase through a different insurer. You may have luck with Allstate, Dairyland, Esurance, Farmers, or GEICO.
  • Adjust your policy. By removing certain extra coverages and raising your deductible, you should be able to see lower rates. Of course, this means that you will have to pay more out of pocket if you need to file another claim in the future.
  • Check with your insurer for any discounts. There may be further discounts that you are eligible for that your insurer did not apply to your policy initially. Discounts are an especially good option if you were not at fault for the accident.
  • Improve your credit. Improving your credit score is a long-term process, but it can save you hundreds or even thousands on your rates in the long run. However, there are four states that prevent insurance companies from using credit scores in their pricing models: California, Hawaii, Massachusetts, and Michigan.
  • Take a defensive driving course. Depending on your insurer, if you show you are committed to driving safely in the future by taking a defensive driving course, this may change the calculation of how risky a driver you are. Look for this discount with Amica, Clearcover, Dairyland, Farmers, Gainsco, GEICO, Good2Go, Infinity, Kemper, Mercury, Nationwide, State Farm, and The General.

What if You Have More Than One Accident on Your Record?

Drivers who are much higher risk and have caused more than one accident still have options for auto insurance. The standard auto insurers may choose to not renew your policy, depending on your risk profile, but there are other ways to find coverage.

  1. Check with smaller insurers. Your first step is to check with smaller insurers. Smaller companies, such as Bristol West and the Farm Bureau, are more likely to offer nonstandard insurance for high-risk drivers.
  2. Use your state’s program. For very high-risk drivers, you may need to find insurance through your state’s assigned risk plan4. Most likely, your rates will be higher than if you didn’t need to purchase insurance through this plan. Additionally, your coverage may be minimal, but you will still have coverage.

Recap

If you cause an auto accident, you can expect your premium to rise, but you can minimize the increase. Work with your insurer to adjust your policy, find discounts to apply to your policy, or shop around with different insurers. Following these steps will make sure that, after an accident, you’re getting the best coverage you can for the lowest price.

Citations

  1. Do auto insurance premiums go up after a claim? III. (2022).
    https://www.iii.org/article/if-i-file-claim-will-my-premium-go

  2. How is fault determined after a car accident? Allstate. (2020, May).
    https://www.allstate.com/resources/car-insurance/determining-fault-after-car-accident

  3. What is Accident Forgiveness? Liberty Mutual. (2022).
    https://www.libertymutual.com/vehicle/auto-insurance/coverage/accident-forgiveness

  4. Plan Sites. AIPSO. (2022).
    https://www.aipso.com/Plan-Sites