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February 24, 2021

How much does car insurance go up after an accident?

No one wants to get into a car accident, and the reasons are obvious. Accidents can cause physical harm to the people and vehicles involved. And as if that weren’t bad enough, they can also make quite a dent in your car insurance premiums. While the extent of the rate increase varies depending on things like the type of accident and, for instance, whether it involves a DUI, the average rate increase in the US following an accident is a whopping 34%.

While there are some cases where your premiums may not see a spike after an accident, most policies are designed to ensure that insurance providers make a buck off of any situation in which they have to make a payout. In the following article, we’ll look at the factors that determine how your rates might increase and what you can do about it. Read on to find out more.

How much will my premiums go up after an accident?

This is likely to be the most common question people ask regarding their insurance following an accident. However, there is no single answer that will cover everyone. This is because each insurer is different, as is each accident. That said, here are a few relevant factors to be aware of:

  • The type of coverage and specific insurer will also determine the rate increase, which can range anywhere from $200 to $900 a month
  • The rate increase depends in part on any prior accidents or moving violations on record, as well as the state in which the vehicle is insured
  • You probably won’t see a rate increase until your next policy renewal
  • Most rate increases will be temporary, with rates decreasing again after about three years if no additional accidents occur

Why do insurers increase their rates following an accident?

The main reason why insurance rates go up after a collision is that with the accident now on your record, you are considered to be a greater risk to the insurer, particularly if you were found to be at fault. If, however, you subsequently avoid additional accidents, you can expect your rates to go back down following a period of time, typically around three years.

That said, each insurer calculates rates for insured drivers differently. Therefore, many drivers find it to their advantage to research their options and compare a number of insurers. In some cases, switching insurers after an accident can cushion the blow of inflated rates, at least partially.

Also be aware that in some states and with some insurers, you may see your insurance rates go up even if you were not found at fault in an accident. Again, if this happens, it may be a good to shop around with other insurers.

How long does an accident stay on record?

Typically, accidents will remain on a driver’s record for three to five years, though this, again, depends on the type of accident and where it occurs. Keep in mind that state legislation can determine the length of time an accident stays on your record. Also be aware that DUIs and reckless driving accidents specifically will stay on a driver’s record for longer, in some cases up to 10 years.

Accident forgiveness

Some insurers offer accident forgiveness plans in which they waive premium hikes for a driver’s first at-fault accident on record. Keep in mind, though, that it is necessary to be enrolled in such programs prior to an accident occurring.

These programs are usually available free to insured drivers with a clean driving record over a significant length of time, though they may also be available at cost to newer drivers or those with hits on their record.

How to save money on insurance after an accident

Even if you are found at fault in an accident, there are still some things you can do to lower your rates. We’ve already mentioned the possibility of switching insurers, but here are some additional tricks that can help you to mitigate rate hikes after an accident.

  • Increase your deductible to lower your monthly payments
  • Consider switching to less comprehensive coverage, particularly if you drive an older vehicle
  • Research ways to improve your credit rating, such as paying off outstanding loans, as your credit rating affects your insurance premiums
  • Check with your insurer to see if there are any discounts available to you, such as for taking a defensive driving class
  • You can even consider switching vehicles, as some cars dictate higher rates, particularly high-performance or flashy vehicles

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