How Much Car Insurance Rates Can Increase after an Accident

Most people expect their insurance rates to go up after an accident that was determined to be their fault, but very few realize that their insurance rates can also go up after an accident that wasn’t even their fault. Even one tiny fender bender can cause your rates to go up when the time to renew your insurance policy finally rolls around again.

Here are some reasons why your insurance rates will increase after an accident as well as some estimations of how much they will most likely increase.

The Risk Factor

When deciding how much to charge you for an insurance policy, insurance companies have to take into account something called the risk factor. Every time you have an accident, the risk factor of you being involved in an accident increases slightly. If you are involved in one accident, there is a greater risk that you will be involved in another one. Even if you are involved in an accident that is deemed to be the fault of the other driver, if you have even one other accident on your record that was deemed to be your fault, you will begin to look prone to accidents to your insurer, and they might decide to increase your rates a second time.

Some insurers will increase your rates if you are involved in multiple accidents even if none of them were deemed to have been caused by you. Because you were the common factor in all the accidents, the insurer may posit that something about your driving habits seems to tend to cause accidents, and they may deem you a greater risk to insure. Insurance companies also have to factor in the possibility of insurance fraud. You might, after all, be staging all those accidents in order to receive the payouts.

How Much?

The reason the amount by which your rates will rise is so hard to predict is because it varies greatly between states, insurance companies, and even accidents. If your accident was extremely severe, your insurance rates could increase by a substantial amount. If additional incriminating factors were involved, such as the presence of alcohol, you might not even be eligible for a policy renewal. You may still be able to find insurance, but it will probably cost you an arm and a leg.

Although each insurance company is different, the average amount by which the average rate goes up after the average accident is usually somewhere around 20 to 40 percent. This may continue for as few as six months or as many as two or three years, after which you may be completely forgiven for the accident and your rates may begin to steadily go down.

Any insurance discounts for which you may have been applicable prior to the accident will probably not be available to you in the aftermath. Defensive driver or safe driver discounts may never become available to you again, especially if you were at fault.

The Exceptions

The good news is that some states allow insurance companies to forgive or overlook minor accidents. If your insurance company has a lenient rating plan, your accident was small enough, and your state allows it, your rates might not go up at all.

Leave a Reply