Car accidents are unavoidable despite how carefully you drive. Yet, drivers need not worry about the losses or damages after an at-fault accident if they have adequate car insurance. Nonetheless, rising premiums are always a cause of concern.
An at-fault accident will increase your car insurance premium, but to what extent will depend on several factors, including your location, the type of damage caused, the claim amount paid, etc.
How Much Will My Premiums Increase After an Accident?
On average, your car insurance rate can increase 46% ($1,157) after an at-fault accident that caused bodily injury. The rise in percentage varies depending on where you live. For example, in Michigan, the premiums increase up to 105%, whereas in Kansas, you will likely pay 8% more than your annual policy cost. The premiums may increase up to 57% if you have caused property damage of $2000 or more.
Some insurance companies offer an “accident forgiveness program” to waive the first at-fault accident. They may offer this either at an additional cost or as a reward for having a clean driving record or teaming up with them for five or more years. You can check with your insurance provider whether they offer such programs and if you are eligible for them.
When Will an Accident Not Affect My Insurance Rates?
Your insurance rates probably won’t increase if you have filed a claim long back, say, before 3-5 years. If you have made a liability claim within the last six months before renewing your policy, you can expect to pay 60% more after renewal. This rate hike will return to normal after 3-5 years.
You won’t be considered at fault (your premiums won’t increase) if you were:
Rear-ended and not convicted of a traffic violation related to the accident
Reimbursed by, or on behalf of, a person responsible for the accident
Reporting damage caused by missiles, birds, falling objects, or animals
Hit by a hit-and-run driver provided the accident is reported to the authorities within a day
How to Prevent Rise in Premiums After an Accident?
Even if you are involved in an accident and are not eligible for the accident forgiveness program, you can still lower your premiums with:
Discounts – Some insurance companies offer discounts for good students or for having multiple policies or a good driving record. Check if you qualify for any of these discounts.
Minimum Coverage – Buying only the minimum coverage mandated in your state can help save on premiums.
Higher Deductible – Agreeing to pay high out-of-pocket costs during a claim will decrease your premium.
Good Credit Score – As some states consider credit scores when calculating premiums, having a good credit score will help you pay less for auto insurance.