The financial consequences of an accident can stay with you for years, but they don’t last forever.
Accidents and moving violations typically remain on your driving record for three to five years. The more accidents or tickets you have on your driving record, the higher your car insurance premiums will be.
The amount insurance can increase after an accident depends on the insurance company, who is at fault, and several other factors. The cost of a car insurance policy could increase by as much as 30% or more after an accident, says Laura Adams, insurance expert and host of the “Money Girl” podcast.
While this is often an unavoidable consequence, you can take immediate action to mitigate the negative effects. What is the first thing you should do when you get back on the road after an accident? be very careful.
“a very important thing to remember when expecting an accident surcharge is to drive safely and conservatively,” says howard goldberg, vice president of customer solutions for plymouth rock insurance, a regional insurance company in the northeast. “stay clear of violations and accidents to avoid the unpleasant experience of starting the clock over.”
then, it’s time to go online or pick up the phone and minimize the consequences on your insurance rate.
Here’s what you need to know about what happens to your auto insurance after an accident.
How much will my insurance go up after an accident?
Almost all auto insurance companies will raise your rates after an accident, but it’s hard to say exactly how much, according to Adams.
“Accidents are definitely going to drive rates up,” Adams says. “Accidents are usually more costly than traffic violations.”
Most states use a point system to track driver violations, and points will generally accumulate on your driving record if you are at fault for one or more accidents, or if you You are convicted of certain traffic violations.
“It’s the points on your driving record that insurance companies see as a red flag and a reason to raise your rates,” Adams says.
Each insurance company evaluates accidents differently; A rate increase after an accident on your auto insurance can be as low as $200 or as high as $800, depending on your insurer. To give you a better idea, we rounded up the average bankrate rates for full coverage before and after a car accident; Take a look below to see the differences in rate increases for 11 car insurance companies.
why do insurance rates increase after an accident?
For insurance companies, the important thing is risk. The more risky driving you demonstrate, the more you will have to pay in your auto insurance premiums.
After an accident, you’ll typically file a claim and be subject to your plan’s deductible. Your insurer will adjust your rates after an accident to reflect any new information they have about your driving history. The rate increase, also known as an “accident surcharge,” will not apply until it’s time to renew your policy.
“If your policy is months away from renewal, you won’t experience any financial impact apart from the deductible until the renewal date,” says goldberg.
An accident doesn’t always mean your auto coverage will become outrageously expensive. Some insurers may be lenient if it’s your first accident and it’s not your fault, especially if you’re enrolled in an accident forgiveness program with your insurer, Adams says.
If you are enrolled in an accident forgiveness program, your car rates will not increase after your first at-fault accident. Some insurance companies offer it as a free benefit for loyal customers with a good driving record. With some companies, new drivers or drivers with poor driving records may have to pay a monthly fee to sign up.
“in some cases, you have to pay extra for that. In some cases, it’s just something they offer as part of their policy,” says Adams.
Many major auto insurers have accident forgiveness programs, including Allstate, Geico, Progressive, USAA, and nationwide.
how to lower your car insurance rate after an accident
Whether you’re anticipating an accident surcharge or already paying one, there are things you can do to lower your car bill besides just waiting.
- Ask about discounts: Check with your insurance company about available discounts. For example, you can combine your auto and home insurance, take a defensive driving course, or get a discount for having certain safety features on your car.
- Drive Safely: The best way to recover from an at-fault accident is to practice safe driving and avoid further accidents or violations, especially during the three years following the accident, when it is crucial to avoid additional violations and at-fault accidents. another accident or violation on your record during that period could be especially costly.
- Adjust your coverage: Beyond the discounts, you can always consider adjusting your coverages and deductibles to make your car premium more in line with your budget. But be careful when weighing your options; you want to make sure you have enough coverage to protect yourself.