How much do your car insurance rates go up after an accident
- Gather necessary information
- Notify the right people
- Pick your battles wisely
- If all else fails, look to your insurer
- Understand your injury coverage
- Can't work? Totaled car? Get paid
- Rent reasonably
- Know what you deserve
- How much does an at-fault accident raise your rates?
- Average car insurance rate increases for one at-fault accident
- Will an accident raise your rates if you’re not at-fault?
- How do insurers calculate an increase after an accident?
- When not to file a claim
- Accident forgiveness
- How much does my age affect my car insurance rates?
- Does my address affect what I pay for insurance?
- Are some cars cheaper to insure than others? Why?
- How does my marital status affect my car insurance rate?
- How much does my driving record impact my car insurance rate?
- How much does my commute matter?
- Why should my credit history count?
- Are some types of coverage more expensive?
- Is there any difference between insurance companies?
Dealing with your car insurance company after a crash can be a time-consuming hassle. Now imagine what it's like to deal with the insurance company of a person you don’t know who crashed into your car.
Here are some tips to ensure you maintain your cool — and your sanity — when making a claim with someone else’s insurer, known as a third-party claim.
Gather necessary information
The driver who crashes into your car is responsible for reporting the accident to his or her car insurance company. However, make sure you contact their insurer as well. Motorists who cause accidents are often reluctant to report them.
It’s vital to get complete information on the other party at the accident scene. Collect the following:
- Other driver's name and address
- Other driver's insurance company name and policy information
- Statements and contact information from witnesses
- Take pictures of the accident scene -- most smartphone cameras are suitable.
This way, you'll have evidence gathered at the scene to bolster your position on the cause of the accident. Check to see if your car insurance company has a mobile app that can help you document the accident while at the scene. Some of the best car insurance companies have apps that come with an accident checklist and tell you how to best gather information so you can make a claim with it or the other party’s insurer.
In addition, the National Association of Insurance Commissioners’ free smartphone WreckCheck App can help you collect and exchange the right information.
Notify the right people
You should then inform the other person's insurer that you have been involved in a crash with one of its policyholders. Relay only the facts of the accident, even if you believe the other driver to be at fault.
The police will determine who is at fault for ticketing purposes. Independently, the insurer will make its own determination of fault, which may or may not match law enforcement’s assessment of fault. The insurer will take into account items such as the police report, driver and witness statements and physical evidence. (Here's more on what to do after a car accident.)
Although you may feel that you have not caused the accident, you should contact your insurance company anyway. This establishes your good-faith accident-reporting effort and can aid you if the other party's insurer denies responsibility for the accident and you need to make a collision claim.
Theoretically, you should only have to notify the other party's insurer of your damages and injuries, take your car to a body shop, visit a doctor and expect the insurer to pay your bills.
But theories don't always reflect reality. Car insurance companies may demand that you obtain their authorization before proceeding with vehicle repairs and injury treatments. If the insurance adjuster doesn't authorize a repair before you take it to the auto shop, it can create a problem. At minimum, make certain that the insurance company has accepted liability before going ahead with repairs. Get that authorization in writing. Ask the insurer to email it to you.
Remember that an insurance company can't force you to take your vehicle to a specific repair facility. Most states allow auto insurers to recommend auto body shops but they aren't allowed to demand you use a certain repair facility. The choice is yours.
Pick your battles wisely
The at-fault driver's insurer may tell you to seek payment from your own insurer because it has no evidence of its policyholder's fault. Although most states have made it illegal for an insurer to deny claims without reasonably investigating the facts, or to deny claims when its liability is reasonably clear, you may not want to fight the other person's insurance company.
If you make a claim with your insurer, it might choose to fight the other insurance company for compensation if it finds other driver is at fault.
If you decide to fight the at-fault driver's insurer on your own you'll need a lawyer — especially if you've been seriously injured. An attorney can help you navigate the sometimes-murky laws that govern insurance. But keep in mind that if you hire an attorney, he will take a cut of any settlement he helps you get.
You may have evidence of the other driver's fault — maybe he even admitted it at the scene — yet you find your claim denied by his auto insurance company. Why? Because he probably told a version of how the accident happened that doesn't square with yours. His insurer may stand behind that story in order to avoid paying your claim.
Sometimes the insurance company will take its policyholder's position, even if it contradicts the police report.
It not unusual for companies to take their policyholder's side in cases where no police accident report was made and fault isn’t obvious. In many states, if an officer at an accident scene determines the damage is minimal (usually less than $500), he or she will not file an accident report. Body shop estimates for that same accident, however, might run into the thousands of dollars. Take your car to a repair shop so you can determine the extent of the damage.
If it's a small claim, you can take the other driver to small claims court. Otherwise, you may need a lawyer. Insurance companies know that unless you've hired an attorney, the longer the matter drags on, the more likely you are to compromise or simply go away.
If all else fails, look to your insurer
Even if you're not at fault, you can make a claim with your insurance company for payment of damages and injuries -- if you have the right coverages.
If you have collision insurance, file a claim with your own carrier. It will pay for the cost of repairs or total loss of your vehicle. If you take this approach, you will have to pay your collision deductible toward repairs. However, you may get that money back if your insurer is able to settle with the other driver's insurance company.
If it turns out the other driver is uninsured and you have uninsured motorist coverage property damage (UMPD), you can make a claim for your vehicle’s damage. There is no deductible for UMPD claims.
Your car insurance rates aren't necessarily going to increase at renewal time if you make a claim under your own insurance policy for an accident that wasn't your fault.
Most state laws prohibit insurers from surcharging policyholders or raising their premium rates for accidents in which they weren't at fault. However, those laws do not preclude your insurer from dumping your policy at renewal time if you've made a few recent claims of any type.
Understand your injury coverage
Can't work? Totaled car? Get paid
If you miss work because of an injury you sustained in a car crash that was someone else's fault, you can expect that person's insurance company to pay for your lost wages. But their policy will have a limit on the amount you can recoup for lost wages.
If you're hit by a driver whose liability limits are not high enough to cover all of your medical expenses and lost wages, you can make a claim under your own underinsured motorist coverage for the remainder. If you live in a no-fault state, your PIP coverage will pay for your lost wages up to the limits of your policy.
When another driver wrecks your car beyond repair, his or her insurance company should pay you the actual cash value of your car before it was totaled. The industry standard definition of actual cash value is "replacement cost" minus "depreciation." Replacement cost is the amount of money it would take to replace your vehicle with a similar one. Depreciation is the amount of money your car has devalued over time.
The insurer also should pay for the sales tax on the new vehicle that you purchase with the insurance money. See what to do when your auto insurer totals your car for more information.
In most states you would make a claim for your injuries through the at-fault person’s auto insurer. If they are uninsured, you could make a claim through your own uninsured motorist bodily injury coverage, if you have it, or through your health insurance.
There are some states that require you to purchase personal injury protection (PIP) and have slightly different rules for collecting for your injuries after an accident. For example, your PIP coverage pays for your medical expenses and lost wages, even if you are not to blame for the crash. Receiving your PIP benefits requires you to make a claim under your own insurance policy. A deductible and/or copayment may be due when you use your PIP coverages.
This is commonly the situation in no-fault states — although the law differs in each one. Some no-fault states give you the option of contacting the at-fault driver's insurer to recover medical expenses not paid by your PIP. Your vehicle’s property damage would still be claimed through the at-fault party’s liability coverage in no-fault states (except Michigan where special rules apply).
According to the Insurance Information Institute, 12 states and Puerto Rico have no-fault insurance laws: Florida, Hawaii,, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota Pennsylvania and Utah. If you live in one of these states, it’s wise to check with your insurance agent, or your state insurance department, for the tips on how to handle third-party accident claims.
Insurance companies are always looking for ways to shave a few dollars from the cost of a claim, and reimbursements for rental-car costs often are the first to meet the blade.
Insurance companies often tell accident victims that they pay only a certain amount per day for rental cars. As a victim of another person's negligence, you have the right to recoup the costs associated with fixing the disruption you experience, including all of the costs of renting a vehicle while your own vehicle is being repaired.
To avoid having to pay for part of a rental, rent reasonably. And don't purchase a collision damage waiver from the rental company if your own insurance policy extends coverage for damage to rental cars.
If you rent reasonably and the insurer wants to short-change you on rental reimbursement, ask the insurer to put its reason in writing. Insurers must inform you in writing of their decisions to deny or reduce payments.
Know what you deserve
Knowing your state's prompt-payment law is beneficial. Every state's unfair claims settlement practices act outlines the time frame in which an insurer must issue you a check for your damages. We have more on how your state’s Unfair Claims Settlement Practices Act can help you.
Laws vary widely from state to state, with many simply mandating a "prompt" payment of claims, while others specify a number of days and the interest owed to you if the insurer fails to pay within the specified period.
One last factor to keep in mind: Unfair claims settlement practices acts often do not extend the same rights to you if you're making a claim against another driver's insurance as opposed to making a claim under your own insurance policy.
Writing a matter-of-fact letter to the at-fault person's insurance company is a smart way to inform it of your expectations and rights. Telling the insurer that you expect it to pay all reasonable costs you incur as a result of the accident, including payment for repairs to or the total-loss value of your vehicle, diminished value of your car, medical expenses, lost wages, pain and suffering and rental-car costs will highlight the insurer's responsibilities under public policy.
Make sure you keep a record of all correspondence, including dates and the names of customer service reps.
Like with most car insurance situations, there’s no simple rule for how much your insurance rates go up after an accident. Whether you’re at fault or not at fault in an accident, changes in your rates vary by insurance company and by state, says Penny Gusner, consumer analyst for Insure.com.
In addition to worrying if your rate will increase, you may also wonder what to do after an accident. It’s wise to exchange the following information with the other driver: name, name of car owner, names of passengers, vehicle make, model and license plate number and the insurance company name, policy number and number for claims filing. Call the police, and if possible, get a police report.
How much does an at-fault accident raise your rates?
An accident where you're blamed makes pricier premiums much more likely, but not in every situation with every company, Gusner says, which is why it’s prudent to shop for the best rates by doing a car insurance comparison.
"One at-fault accident could raise your rates anywhere from 10 percent to 40 percent -- or not at all," she says. "Some insurers will let one minor accident slide. However, if the crash and resulting claim isn't being surcharged (where your base rate is raised), you may still pay higher rates due to losing any good driver discount you received for keeping a record clean of violations or accidents."
Have a second at-fault accident and your premiums will probably skyrocket. "That most certainly will hike up your rates," Gusner says. "How much varies greatly again (but policy-holders can expect a jump) from 40 to 150 percent."
Average car insurance rate increases for one at-fault accident
|State||Average annual car insurance rate|| |
Average annual car insurance rate for one at-fault bodily injury accident
|District of Columbia||$1,628||$1,971||19%|
Will an accident raise your rates if you’re not at-fault?
A crash doesn't always equal more expensive coverage. Gusner, consumer analyst says many insurers may be lenient if it's your first accident and not your fault.
"Whether your rates go up after a not-at-fault accident really varies by insurance company and by state," she explains. "One accident may not cause your rates to rise, but if you have been in multiple accidents, even if you were not-at-fault for each, your insurer may increase your premiums or not renew your policy."
How do insurers calculate an increase after an accident?
When an insurance company does raise rates following an accident claim, it employs a "surcharge schedule." This schedule determines how much the hike will be and can also come into play after you've been ticketed for moving violations.
Many insurers use standards set by the Insurance Services Office (ISO), which allows an increase of 20 to 40 percent of the insurer's base rate after an accident claim.
This base rate is the average rate charged in the state before discounts and other adjustments, plus the insurance company's claims-processing fee. The surcharge for multi-car policies is 20 percent of the base rate for the first two vehicles on a policy; it's 40 percent for a single-car policy, according to the ISO.
Here's an example of what you might expect under the ISO standard: Let's say your policy is for two cars with a $300 premium for each, and your insurer's base rate is $400. After an accident, you could be hit with an $80 surcharge -- which is 20 percent of the $400 base rate -- on both. That would bring your total surcharge to $160, about a 27 percent jump on your rate.
Ultimately, though, each company sets its own surcharge schedule, as long as it's approved by state regulators. The amounts and circumstances, Gusner points out, may change from state to state even within the same insurance company.
"Some states have very specific rules about what can be surcharged, such as North Carolina, which has its own surcharge schedule insurers must use, and New York, which has strict guidelines about what can hike up rates," she explains. "In other states, it's totally up to the insurer's internal rules; however, they must be approved by the state."
When not to file a claim
Gusner and most industry experts agree that filing a claim is probably a mistake if the vehicle repair costs are under or just above your deductible. Instead, it's smarter to pay out-of-pocket and avoid any surcharges generated by the claim.
"Keeping small claims to yourself, and away from your insurer and claims history, can help you keep future rates down," Gusner says.
But, she adds: "One caveat is that your policy may require you to report any accidents. This may be noted in your file somewhere - be sure to ask if it will be so it's clear you are not yet making a claim but are prepared to pay for repair costs at this juncture."
"Accident forgiveness" is a frequently promoted policy option or loyalty reward that most of the major insurers -- including Allstate, GEICO, The Hartford, Liberty Mutual, Nationwide, Progressive and State Farm, among others -- offer as a way to avoid rate increases after mishaps. They're usually for the best customers, those without past accidents and moving violations.
In general, accident forgiveness works this way: If you have a clean driving record, the insurance company will ignore the first accident and not raise your premium. Some insurers may also cut the deductible by as much as $100 for each year you maintain a spotless record after the crash.
The details vary from company to company. Some may give you accident forgiveness immediately, while others will only do so after you've been an accident-free policyholder for as many as five years. Still others may forgive one mishap per policy in a three-year time frame, some will forgive one every six years, and some will waive one per driver listed on the policy every three years. You may also be required to have had no moving violations for three years.
Also, the feature usually comes with a price tag. At Allstate, for example, you get accident forgiveness by upgrading to either a Gold Protection or Platinum Protection package under its Your Choice Auto plan, which can add about 8 to 15 percent to the cost of a standard policy.
Progressive offers a forgiveness plan under its loyalty rewards program to customers who have been with the company for at least five years. However, remaining with one insurer for several years may not be the best way to go -- the Insurance Information Institute, a trade group, says consumers should be willing to switch if they find a competing company that offers the best options at the best price.
*Methodology: Rates are from six insurance companies for 10 different ZIP codes in each state. Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.
For ballpark estimates on your car insurance rates, or to find out how, why or how much your car insurance will go up or down after a ticket or a change of address, we have several helpful articles and car insurance calculators.
CarInsurance.com’s average car insurance rates tool provides average auto insurance rates for nearly every ZIP code in the U.S. It allows motorists to explore comparative rates within their own city or across the nation.
The "How much car insurance do I need?" tool can suggest what level of coverage is best for you, based on your age, the state you live in, your car's model year, whether you own or finance your car, and whether you own or rent your home.
By their nature, averages and estimates don't apply specifically to you. For that, you can use our online quote comparison tool and get matched with multiple car insurance providers, who will give you a quote, or you can call one of our licensed insurance agents at 855-430-7753.
But you may simply be looking ahead to a new car, a marriage or a move across town and wonder about the consequences. We advise that you check car insurance rate quotes before making life changes, so you'll be aware of how your premium may change and can budget for it appropriately, or switch to a provider that offers a better price given your new situation.
Below are answers to some of the most common questions about the factors affecting your car insurance rate.
How much does my age affect my car insurance rates?
Auto insurers penalize inexperience rather than age. Of course, the vast majority of inexperienced drivers are teenagers. Rates for 16-year-olds can double or even triple their parents’ car insurance annual premiums.
The less experienced the driver, the higher the rates. Among drivers with clean records and no accidents, no other factor changes rates more.
Statistically, inexperienced drivers crash – a lot – and so they are the riskiest category of drivers to insure. Car insurance rates reflect this high risk.
The inexperience penalty drops slowly until about year 10. As an example, this is what the inexperience surcharge for basic bodily injury liability coverage looks like at one California car insurer during the first decade of driving:
|Experience||Bodily injury base rate||Inexperience surcharge||Premium|
If you keep a clean record after age 25, rates typically stay relatively stable until you become a senior driver, when crash rates go up and premiums begin to rise again.
Does my address affect what I pay for insurance?
If you live in a highly populated urban area, congestion, accidents and insurance claims are more prevalent. Living and driving in a metro area will make your rates higher than if you live in a rural area, where having an auto accident is less likely.
Car insurance companies look at factors such as the rate of stolen cars in your area, and the number of cases of vandalism, claims and fraudulent claims. All of this helps insurers discern the risk associated with insuring you and your car in that ZIP code, whether you ever have made a claim or not.
All other factors equal, your ZIP code can change your rate by hundreds of dollars.
Are some cars cheaper to insure than others? Why?
Auto insurers track which cars have the most wrecks and the worst injury records. Those factors impact the cost you pay for liability insurance -- which covers the damage you cause to others.
Insurers also know which cars are expensive to buy, expensive to repair or more easily stolen. Those factors drive up the cost of collision and comprehensive coverage, which repairs or replaces your own car.
The calculations about the risk of a certain car are made independently. For example, if you are an inexperienced driver in a car with a poor claims record, you are penalized twice. A more mature driver in the same car would pay a surcharge for the car, but not one for inexperience.
Insurers can also choose not to cover certain types or brands of cars. For example, some won’t insure a lifted pickup truck, a kit car or certain exotic cars.
How does my marital status affect my car insurance rate?
Married couples have been found to have fewer accidents and claims than single drivers do.
Rates can be from 5 percent to 15 percent lower for married couples just because of their marital status. But there are also other discounts married couples can look forward to when they combine their policies, such as a multicar discount, or a multipolicy discount if they have a renters or homeowners policy with the same insurer.
An insurer considers you single if you have never been married, or are widowed or divorced.
How much does my driving record impact my car insurance rate?
Your driving record is paramount to your car insurance company. Safe drivers get a discount from standard rates for keeping a clean driving record. On the flip side, individuals who have a moving violation (speeding or a DUI, for example) or an accident on their motor vehicle record are more of a risk and can face a surcharge on top of standard rates.
If you have enough violations or accidents, you can become uninsurable according to some car insurance companies’ underwriting rules. For example, some insurers reject anyone with four or more chargeable accidents in three years, or more than three DUIs in seven years, or more than 15 points on the driver’s motor vehicle record.
In general, a minor violation such as a speeding ticket can boost your rates 20 percent to 40 percent. You may not be surcharged for the actual ticket, but will lose your good-driver discount. If you have a major violation like a DUI, your rates can go up 100 percent or more. The more risk you appear to be to your auto insurer, the more you will pay.
How much does my commute matter?
You car’s annual mileage is a rating factor for many car insurance companies. The less you drive, the less risk you have of being in an accident. Also, how far you drive for your commute lets the insurer know what kind of risk you are during the congested, high-risk hours.
Your insurer can also use the length of your commute to determine if you head into a metro area from your rural or suburban home. If you live outside of Los Angeles, but your commute is 30 miles, your insurer can predict that although your local area is low-risk, your commute into the heart of a very populated metropolitan area pushes your risk factor much higher.
Why should my credit history count?
Insurance companies routinely check your credit rating as part of your application process, except in California, Massachusetts and Hawaii, where state law prohibits credit from being a pricing factor.
Credit scores help the insurance companies assess the risk level of a potential customer. Research has shown that those with lower credit scores (typically under 600) are more likely to file claims, file exaggerated claims, or even commit insurance fraud.
Those with low scores may face a surcharge. Rates for those with higher scores are typically unaffected.
Your credit score can also affect how an insurance company allows you to pay for your policy, since statistics show that people with lower credit scores are more likely to miss a payment. Customers with very poor credit scores may be required to pay the entire premium for a six-month policy up front. Customers with low credit scores sometimes won’t qualify for monthly billing, or they may need to pay a large percentage of the policy up front and the remainder monthly.
Are some types of coverage more expensive?
There are several types of car insurance. The more coverage you get, the more you will pay. If you get a bare-bones liability policy that covers only what the state requires, your car insurance costs are going to be less than if you bought coverage that would repair your own car, too.
Liability coverage tends to cost more because the amount the insurance company risks is higher. Coverage for collision and comprehensive insurance is limited by the replacement cost of the car itself. But medical bills and multiple-car accidents could push a liability claim into the hundreds of thousands of dollars.
If you don’t have enough liability coverage, you could be sued for the difference by anyone you injure.
Comprehensive and collision damage is affected by the deductible you choose. The higher the deductible, the less the insurance company will have to pay -- and the lower your rates.
Medical coverage, such as uninsured motorist bodily injury, medical payments or personal injury protection (PIP), will cause your rates to go up. Without some kind of medical coverage, if you don’t have health insurance elsewhere, you might not be able to pay for treatment if you are injured in an accident you caused.
Is there any difference between insurance companies?
Insurance companies must follow state laws, but within those laws they price coverage based on their own underwriting rules and guidelines. One insurance company may look at your driving record for five years, another only for three. The surcharge for a speeding ticket may raise your insurance by 10 percent with one carrier but only 5 percent with another.
You should shop around and get quotes from several carriers. Make sure you are comparing apples to apples -- the same coverages with each insurer -- and check the reliability and financial stability of the insurance carrier.
Finally, make an informed decision about who you want to be insured with for the best price and protection. Don’t let a small savings drive you away from an insurance company you know and trust.