How Much Does Insurance Increase After An Accident?
A car accident is devastating enough without the additional cost of car insurance following the crash. Rates rise when accidents occur, which is why many drivers are even more upset following an accident. There are many misconceptions about the rise in the cost of insurance, too. Some drivers believe their rates won’t rise if they are the victim rather than the person who caused the accident. Others are under the impression their insurance won’t increase much if the damage to the vehicles involved is minimal, and some believe their rates won’t rise if they have a good driving history. The truth is you never know whose insurance rates will go up and whose will not. Truth be told, it appears most individuals will see a rise in their insurance regardless who was at fault.
Start reading now to learn about the details on car insurance after an accident.
The Increasing Amount
The increasing amount varies by state, and depending on where you live, your insurance company, and your driving record, you might notice your rates only rise a little. Of course, others might see their insurance go up significantly. Statistics show there are some states where rates go up tremendously compared to others. California, Massachusetts, Texas, North Carolina, and New Hampshire are the states in which your rates are more likely to increase by more than fifty percent following a car accident. States such as Michigan, Maryland, Oklahoma, Kentucky, and Montana are the states in which your rates are less likely to rise significantly, and the average rate increase in these states is only around twenty to thirty percent. The amount your rates increase also depends on your situation. Were you at fault? Did you become a victim of someone else’s negligence? There are more than a few factors involved in this.
Continue reading to learn about insurance in the aftermath of an at-fault car accident.
At-Fault Accident
An at-fault accident is one where you are the driver to blame, meaning you are the person who caused the accident because you were speeding, not watching, or doing something else illegal. However, despite your fault in the accident, you might live in a no-fault state, which means your state doesn’t recognize fault in an accident and each party goes through their own car insurance company for repairs and other expenses they require. If you live in a state that recognizes fault and you cause an accident, chances are good your rates will rise higher than anyone else’s. Your insurance will go up for being a faulty driver, but the amount depends on the type of accident you’re in. For example, your rates will rise significantly if you were driving under the influence when you caused an accident. If you merely back into a car in the parking lot by mistake, your rates typically won’t go up as much.
Continue reading to learn about not-at-fault car accidents.
Not-At-Fault Accident
If you make a claim on your insurance at all, you risk your rates going up, even when it's a not-at-fault premium. Not all people who are a victim of a car accident caused by someone else will see their rates rise, but it’s not uncommon for a change, though it is less common if you are not the at-fault driver. Your insurance company is responsible for paying for the damages that occur, which makes you a riskier driver. Your insurance company has to recoup their losses, which is when a rate increase occurs. A few states do not legally permit an insurance company from raising your insurance rates if you are not the at-fault driver, but there is no such law or regulation in most states.
Continue reading to learn how rate increases are calculated.
How It's Calculated
There’s no one way your insurance company will figure out how much money your rates will increase following an accident, but there are different factors taken into account regarding how it's calculated. The most important factor is fault. As mentioned, in states that recognize fault, you’re going to pay more if you caused the accident. Another important factor your insurance company considers is your driving history. If you have a history of making claims whether you are at-fault or not, you’re going to see your premium increase more. Other factors include where you live, the crime rate in your area, your age, and other factors that play into the risk you take each time you get into the car you drive. Finally, your specific insurance policy will often play a role, so check it to see what the standard rate increase is. Most companies put the amount in the paperwork, called a “policy surcharge following an accident,” but many individuals don’t see it when they sign.
Continue reading to discover how long insurance increases last.
How Long Does The Increase Last?
The great news for you if your insurance rises following an accident is it’s not forever. If you find yourself asking how long will the increase last following your accident, you’re in for some good news, as it's not forever. Most insurance agents look at accident reports for three to five years when someone applies for a new rate, meaning any accidents you've been in will most likely affect your rates for a period of three to five years.
However, this is not a guarantee. Some companies might only look back two years, which allows you to shop around for a new policy with more affordable rates a lot faster following an accident, and other agents look back further. You might be able to shop around and find a lower rate if you’ve been accident-free for a few years, but it might not drop with your company. It all depends on the state in which you live, the details of your accident, and the severity. If it was a minor fender-bender, you might find it doesn’t affect your rates as long as a more severe accident will.