How Much Does Insurance Go up after an Accident?
You do what you can to stay safe behind the wheel, from preventing distractions while driving to following the rules of the road, but that doesn’t mean you’re not vulnerable to accidents. If you’ve ever been in an accident and filed a claim with your car insurance company, you may have noticed an increase in your insurance premium.
There’s no quick and easy rule for how much your rate goes up after an accident, but we’re here to walk you through how your premium might be affected after filing a claim.
How Much Does an At-Fault Accident Affect My Rate?
Insurance is similar to a snowflake — no two insurance companies are the same. So changes in your car insurance rate after an accident will vary from company to company. That being said, most companies will raise your rate after an accident.
If you’re at fault for an accident, the chances of seeing a hike in your premium are much more likely. This hike is called a surcharge — which is basically a penalty your insurance company tacks onto your premium for getting into an accident. In the eyes of your insurance company, if you cause an accident, you’re a “higher risk driver” and more likely to cause an accident in the future. They make up for this potential risk by raising your rate for a period of time.
The amount your rate goes up depends on the company and how many accident claims you’ve filed in the past. Some companies promote “accident forgiveness” as a way to reward good drivers. Basically, this means that as long as you have a clean driving record, they’ll forgive your first accident and not raise your premium.
If your company doesn’t offer accident forgiveness, you could see your rate rise 10 to 40 percent (or more in some instances) after just one accident. If you get into a second accident, your rate could increase by double! And to top it off, you’ll lose any good driver discounts for keeping a clean record.
Will My Rate Go up if I Wasn’t At Fault for an Accident?
Although you may not like it, you probably have an understanding as to why your rate increases if you’re at fault for an accident — you were, after all, legally at fault. But it’s probably pretty frustrating when your rate raises if you aren’t at fault.
Usually, after determining the at-fault driver in an accident, you’ll file a claim with that party’s insurance company and you won’t need to file against your own policy. But let’s say that driver doesn’t have insurance or they took off after the accident, leaving you and your totaled car in the dust. You’ll probably file a claim with your insurance company to cover the cost of damages. Here’s the deal — anytime you file a claim with your insurance company you are susceptible to a surcharge on your premium. Whether your rate actually goes up after a not-at-fault accident varies by insurance company, but it is a possibility.
Thankfully, your rate probably won’t increase as much as an at-fault claim. And, many insurance companies won’t add that surcharge for not-at-fault accidents unless you’ve been in multiple accidents. When purchasing insurance, remember to shop around and talk to an agent about how your premium will be affected if you file a claim for an accident that wasn’t your fault.
How Long Does an Accident Stay on My Record?
Does an accident claim stay on your record forever? Nope! Again, it depends on the company, but most insurers look back three to five years when setting your rate. Like we said, you can consider that surcharge a penalty, and fortunately that penalty goes away after a certain amount of time. Just avoid any accidents in the meantime!
When to Avoid Filing a Claim
The whole reason you have insurance is so that, in the event of an accident, you have a financial safety net to fall back onto. So why wouldn’t you file a claim? Sometimes, it’s actually in your best financial interest to avoid filing a claim. For example, if the vehicle repair costs are less than your deductible or even just a little more than your deductible, you might save more money in the long run by not filing a claim and in turn picking up that surcharge. Sometimes it’s best to keep your claims history clean by keeping those smaller claims to yourself.
Just double check that your policy doesn’t require you to report every accident you’re involved in. You can give a quick call to your agent to find out these details.
I Never Filed a Claim but My Insurance Still Went Up
Did you notice an increase in your car insurance premium rate even though you’ve never filed a claim? An insurance company sets your rate based on a number of factors, some of which are in your control, like speeding tickets and filing claims, and some that are not in your control. Your rate may raise come renewal time because your insurance company has to keep up with increasing costs of certain trends.
For example, new technology in cars means more expensive repairs, the cost of medical care continues to increase, there are more accidents occurring because more people are driving, and even our weather is causing a lot more damage to vehicles in recent years. There are many factors apart from filing a claim or getting a speeding ticket that can cause your rate to increase. Your company will probably raise your rate to help balance out the increasing cost of certain risks.
Here’s a more in depth look at why your auto insurance rate went up — even though you didn’t file a claim.
There are a lot of moving pieces when it comes to car insurance, but we want to help you stay confident in your coverages. To understand how your policy works, call up your American Family Insurance agent — they’ll be able to answer your questions and get you in the know.