How Much Does Car Insurance Go Up After An Accident?

After an at-fault accident, premiums rise by an average of 34 percent, the equivalent of $67 monthly or $800 annually.

Auto insurance providers evaluate your risk before providing you with a quote. Driving history is one factor that determines how risky you are to insure—when you cause an accident, your insurer considers you more likely to get into another. This, in turn, costs the company more money. That’s why your rate will increase after an at-fault accident.²

USAA, GEICO, and State Farm have some of the cheapest rates after an accident. Regional insurers Erie and Auto-Owners also have competitive rates.

The following factors determine how much your auto insurance premium increases after an accident:

• Accident severity: An accident with costlier damages usually results in a greater premium increase. Insurers may also account for whether the accident only involved property damage, or involved property damage and bodily injuries.
• Who caused the accident: Expect your premium to increase if you were at fault for the accident.
• Where you live: Each state has different laws governing how an insurance company can set rates and how long an accident remains on your driving record.
• Your provider: Each insurance company has a different risk calculation formula, which is why shopping around after an accident can be beneficial.³

An accident typically affects your car insurance rates for three years, with the increase dropping each year within that period.

Some insurers may look farther back — five to seven years — depending on where you live and whether you have other violations on your record.

If you didn’t cause an accident, auto insurance premium hikes vary by state. This is because states have different fault systems. States with at-fault laws require the responsible driver to cover the other party’s medical expenses and allow the victim to sue for damages. This type of insurance is also called liability insurance.

Your post-accident compensation also depends on the state’s negligence laws:

• Comparative negligence: Allows partial fault to apply to both parties, meaning you can split damage costs.
• Contributory negligence: Do not allow you to receive compensation if you have any negligence in an accident.

After an accident, your premium increases because your provider deems you more expensive to insure and more likely to get into another accident. Fault and negligence laws factor into your actual rate increase after a not-at-fault accident, so look into your state laws.

Accident forgiveness is another option if you’re risk-averse and want a safety net for potential accidents. These auto insurance providers offer accident forgiveness, an optional coverage that prevents premium hikes after an accident:

• 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, Massachusetts, New Jersey, or Pennsylvania)

If you qualify and add this coverage to your policy, your premium won’t increase after your first accident.

Even if you see a premium increase after an accident, you can lower your rate in multiple ways:

1. Shop around. Since each insurance company has a different risk calculation, you can lower your premium increase through a different insurer.
2. Adjust your policy. You can lower your rates by removing certain coverages and raising your deductible.
3. Check with your insurer for discounts. You may be eligible for other discounts that your insurer didn’t apply to your policy.
4. Sign up for a telematics program. Telematics programs track driving behaviors like braking, accelerating, speeding, and phone use, and provide a discount for good driving. If you got into an accident but generally drive safely, it’s a good way to lower your premium.
5. Improve your credit. Improving your credit score is a long-term process, but it can save hundreds or even thousands on your rates. Only these four states prevent insurance companies from using credit scores in their pricing models: California, Hawaii, Massachusetts, and Michigan.
6. 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.
7. Type of vehicle: Cars with limited safety features and a higher risk for theft will result in higher rates. If you drive a safer car, your rates will be lower because the risk of damage and injury is lower.

If you have multiple accidents or violations on your record, insurers may designate you as high-risk. A standard insurer could reject you as a customer or quote an exorbitantly high premium.

In this case, there are other ways to find coverage.

1. Look at insurers that specialize in high-risk drivers. While more expensive than standard insurers, non-standard or high-risk providers like Direct Auto specialize in insuring high-risk drivers and those with driving records.
2. Use your state’s program. Very high-risk drivers may need to find insurance through their state’s assigned risk plan.⁴ Most likely, rates will be higher compared to purchasing insurance through this plan. Once your driving record improves, you can shop around for a policy outside of the high-risk pool.

Long story short: if you cause an auto accident, expect your premium to rise. Work with your insurer to adjust your policy, find discounts to apply to your policy, or shop around with different insurers to reduce your auto insurance premium. Following these steps will make sure that, after an accident, you’re getting the best coverage you can for the lowest price.