How a Car Accident Changes Your Insurance Rate
Your rate goes up after an at-fault accident, usually by 20 to 40 percent, though the increase depends on your insurer, your state, and whether you caused the crash
An accident you caused will raise your premium at renewal. The size of the increase varies widely — some insurers add 20 percent, others 50 percent or more. Your state's rules, your driving history before the accident, the cost of the damage, and whether anyone was injured all factor into how much your rate climbs. If you were not at fault, your rate typically does not rise, though this depends on your policy and your insurer's practices.
The increase is not automatic on the day of the accident. Your insurer applies the higher rate at your next renewal date, which could be months away. Until then, you pay the same premium. When the renewal notice arrives, you will see the new amount. At that point, you can shop other insurers — some may offer lower rates than your current company, even with the accident on your record.
Key Takeaways
- An at-fault accident typically raises your rate by 20 to 40 percent or more, depending on your insurer and state law.
- The rate increase takes effect at your next renewal date, not immediately after the accident.
- Not-at-fault accidents usually do not raise your rate, but some insurers may increase it anyway depending on your policy terms.
- You can shop for new insurance quotes after an accident, and some insurers offer lower rates than your current company despite the accident.
- The accident stays on your driving record for three to five years in most states, affecting rates during that entire period.
How insurers decide the size of your rate increase
Insurers use the accident as a signal that you pose higher risk. They look at what caused the crash — rear-ending someone, running a red light, or losing control on a curve all suggest different levels of risk. A minor fender-bender costs less to repair than a multi-car collision, and that cost difference affects the increase. An accident with injuries raises your rate more than one with only property damage.
Your history before the accident matters too. If you have been with the same insurer for years with no claims, your rate increase may be smaller than someone with prior accidents. Some insurers offer accident forgiveness programs that waive the rate increase if you meet certain conditions — usually a clean driving record for a set number of years before the accident. Check your policy documents or call your agent to see if you have this coverage.
State law also sets limits on how much insurers can raise rates. California, for example, restricts increases to a smaller range than other states allow. Your state's insurance commissioner's office publishes the rates that major insurers use, so you can see what other companies charge for drivers with accidents in your situation.
When a not-at-fault accident still raises your rate
If the other driver was at fault, your insurer should not raise your rate. However, some insurers include a "surcharge" or "rate adjustment" for any accident, regardless of fault. This is legal in many states, though some states prohibit it. Read your policy or call your agent to understand your company's specific rules.
If you file a claim with your own insurer (called a collision or comprehensive claim), some companies treat it the same as an at-fault accident for rate purposes, even though you were not responsible for the crash. This is another reason to check your policy. If the other driver's insurer is paying for the damage, you may avoid filing a claim with your own company and protect your rate from any increase.
How long the accident affects your rates
The accident remains on your driving record for three to five years in most states, though the exact length varies. During that time, it will show up when you shop for insurance, and insurers will factor it into your rate. After the period ends, the accident drops off your record and should no longer affect your premium.
Some insurers offer "accident forgiveness" or "new accident forgiveness" programs that remove the rate increase after a set period — often one to three years — if you have no other incidents. These programs are not universal, and they come with conditions. You may need to have been claim-free for a certain number of years before the accident, or you may need to maintain a clean record after it. Ask your insurer whether you have this option.
Shopping for insurance after an accident
Once your renewal notice arrives with the new rate, get quotes from at least three other insurers. Some companies specialize in drivers with accidents or violations and may offer lower rates than your current insurer. Online quote tools let you enter your accident history and see what different companies will charge. You do not have to stay with your current insurer just because you had an accident.
When you shop, be consistent with the coverage amounts and deductibles you currently have. A lower quote that comes from dropping collision coverage or raising your deductible is not a true comparison. Once you find a better rate, contact that insurer to start a new policy. Your new coverage can begin on the date your current policy ends, so there is no gap.
Some insurers offer discounts that can offset part of the rate increase — bundling home and auto insurance, taking a defensive driving course, or maintaining a paperless account. Ask about these when you get quotes. A defensive driving course discount typically ranges from 5 to 10 percent and can be applied even after an accident.
The difference between your rate and your record
Your insurance rate and your driving record are separate things. The accident appears on your driving record (maintained by your state's Department of Motor Vehicles) and stays there for three to five years. Your insurance rate is what your insurer charges you, and it can go up or down based on many factors beyond just the accident — your age, where you live, the car you drive, and how much coverage you buy all affect it.
Some states allow insurers to use your driving record to set rates, while others restrict what insurers can consider. A few states prohibit insurers from raising rates for a single accident, though these are rare. Check your state's insurance commissioner's website to learn what rules apply where you live.
What happens if you do not report the accident to your insurer
You are required to report accidents to your insurer, even if you do not plan to file a claim. If you skip this step and the other driver files a claim later, your insurer may deny coverage or cancel your policy for failing to report. Reporting the accident protects you legally and gives your insurer a chance to investigate and determine fault.
If you caused minor damage and want to avoid a rate increase, you have the option of paying for repairs yourself rather than filing a claim. This is a personal choice, but you still need to report the accident to your insurer. Some people choose this route when the damage is small and the cost of repairs is close to their deductible.
Frequently Asked Questions
How much will my rate go up after an accident?
Most insurers raise rates by 20 to 40 percent after an at-fault accident, but this varies by company and state. Some raise rates by 50 percent or more. Your specific increase depends on your insurer's pricing, your driving history, the cost of damage, and whether anyone was injured. Contact your insurer or get quotes from other companies to see what you will pay.
Does my rate go up if the other driver was at fault?
Usually no, but some insurers charge a surcharge for any accident on your record, regardless of fault. Check your policy or call your agent to understand your company's rules. If the other driver's insurer is paying for repairs, you can often avoid filing a claim with your own insurer, which protects your rate.
When does the rate increase take effect?
The increase takes effect at your next renewal date, not immediately after the accident. If your policy renews in six months, you will pay your current rate until then. When the renewal notice arrives, you will see the new amount and can shop for other quotes at that time.
Can I get the accident removed from my record early?
No, the accident stays on your driving record for the full period set by your state — usually three to five years. Some insurers offer accident forgiveness programs that waive the rate increase after one to three years if you remain claim-free, but the accident itself remains on your record. After the state-set period ends, it drops off automatically.
Should I file a claim or pay for repairs myself?
If you caused the accident and the repair cost is close to your deductible, paying out of pocket may cost less than filing a claim and facing a rate increase. However, you must still report the accident to your insurer. If the damage is significant, filing a claim is usually the better choice, and you can shop for lower rates at renewal.