Auto Insurance Claims That Increase Rates

In general, the more auto insurance claims you file, the more your car insurance will cost, even if the losses were not your fault.

No-Fault vs. At-Fault Accidents

The most expensive rate hike would be after an at-fault accident as insurance companies will see you as a high-risk driver.¹ However, you can still see a rate increase following an accident you didn’t cause, such as someone hitting your parked car. The only time you wouldn’t see an increase is if you had accident forgiveness protection, which we’ll explain more about below.

Comprehensive Claims

Comprehensive insurance covers property damage from events other than collisions, such as vandalism, car theft, inclement weather, or hitting an animal. Surprisingly, insurers can increase your rates following comprehensive claims, although much less than for at-fault accidents. Even other people in your area making comprehensive claims can raise your rates as it implies a greater chance of car theft, vandalism, and more.²

Our Top Picks:

• Auto-Owners ($187 monthly) and Erie ($189 monthly) offer some of the cheapest rates after an at-fault accident. Each is only available in certain states, so check availability where you live.
• USAA offers cheap average rates after an at-fault claim at $200 monthly. It’s available to military members, veterans, and their families.
• GEICO ($236 monthly) and State Farm ($248 monthly) are the cheapest widely available providers. It’s worth getting a quote from each.
• Nationwide ($249 monthly) and Progressive ($254 monthly) also come in under the national average after a claim. Progressive also has some of the cheapest rates for drivers with DUIs, and Nationwide is among the cheapest with low credit.

Accident severity, driving history, and fault are key determinants of how much your insurance premium might increase after a claim.

Accident Severity and Claim Cost

The more severe the accident, the higher your premiums will go. Generally, your car insurance rates will increase less if an accident only involves property damage and no bodily injury, as insurance companies view accidents with injuries as a higher risk. Similarly, more expensive claims will cause higher rate increases, too.

Driving Record

Someone with a bad driving record could be more affected financially affected than someone with a good driving record.

Fault

You’ll pay more if you are found to be at fault in an accident. The higher your percentage of fault, the higher your rate increase will be.

Minnesota, Illinois, and Virginia have the highest rate increases after an accident, on average. Increases are more modest in New York, New Hampshire, and Alaska.

*Indicates USAA has cheaper rates — however, the company’s availability is limited to military members, veterans, and their families.

To avoid inflated insurance rates, some people choose not to report a car accident and don’t file claims for them. They prefer to pay for their losses out of pocket and avoid dealing with premium increases and insurance deductibles. However, if someone sues you over an accident, you’ll want your insurance company to be able to defend you using evidence, so keeping your insurer in the dark is a poor choice. Plus, if you don’t submit claims in time, your company may not be required to cover you, depending on your state’s statute of limitations.

You’ll want a police report for your claim, too. Although it may seem easier to leave both the cops and your insurer out of the situation, it’s best to submit claims for any incidents you have — except those where the expected repairs will cost less than your remaining deductible.

Accident forgiveness auto insurance coverage means your premium won’t increase after your first at-fault accident, as shown in this illustration.

What is Accident Forgiveness?

Accident forgiveness is a policy where an insurance company promises it won’t increase the insured’s premium following their first at-fault accident within a given period, typically a few years. Every state except California allows accident forgiveness.⁴ In California, where car insurance is expensive enough as is, offering accident forgiveness would increase prices too much, breaking Proposition 103, which made insurance companies decrease rates by 20 percent.

Companies That Offer Accident Forgiveness

Does your current insurance provider offer accident forgiveness? The following is a list of companies with accident forgiveness policies; other insurers we mentioned above, like State Farm and Travelers, do not have these policies.

It’s probably not worth switching auto insurance companies just to get accident forgiveness, as these policies will be more expensive, but if you are already at a provider with this policy, take advantage.

Accidents will stay on your record for anywhere from three to five years, depending on your state and the severity of the accident.

Although rates usually go up after an accident, there are ways to lower auto insurance costs:

1. Switch carriers: Another provider may offer you a better deal. Don’t be afraid to shop around and compare quotes.
2. Adjust insurance coverage: Dropping unnecessary coverage will decrease your rates.
3. Raise your deductible: Similarly, raising your deductible will also reduce premiums.
4. Check for discounts: Ask your insurance agent what discounts you qualify for or could qualify for. Something as simple as enrolling in paperless billing could save you money.
5. Improve your credit: In every state except Massachusetts, Hawaii, Michigan and California, insurance companies give higher rates to drivers with bad credit as they’re more likely to file claims. Improving your credit score could help you get lower rates.

Unfortunately, filing an auto insurance claim often increases rates. However, the entire point of having car insurance is to ensure you have coverage in the event of any losses, so if you never submit claims, what is the point of paying for it at all? Let your policy do what you signed up for and protect your finances by submitting claims when they arise.