Car Insurance After an Accident: How Much Will It Go up and Why?

Car accidents happen in the blink of an eye, but the consequences from them last for years. The memories with the sounds of glass breaking, metal crunching, and then the moment of silence immediately after never truly go away. The injuries that people sustain in them can last for years as well.

And the financial repercussions last for years as well. When you are in a car accident, whether it’s your fault or not, you will see a change in your car insurance rates.

You will wonder, why is my car insurance going up? How much of a rate increase will I see in car insurance after an accident? Can I do anything to help it go down?

By the time you’ve finished reading this article, you will understand how much your rates will go up after an accident, why they go up, and what you can do to help them go down.

Costly Car Insurance After An Accident

You can expect your car insurance rates to go up by approximately 46% if you’re driving the car involved in an accident and the accident causes an injury. The specific increase depends on several elements, though:

  • The state you live in
  • If you were at fault
  • Driver history
  • Driver experience
  • Miles driven
  • The company that holds your policy

All of these elements factor into how much of an increase you will experience. In some states, the increase will be as much as 69%. Ultimately, the company that holds your policy determines the increase.

If you’re with one company it may go up more than with a different company. Unfortunately, you don’t know this until you have a car accident. Then, once you have an accident, it may be difficult to have a car insurance change because you’re considered a bigger risk than before you had a car accident on your record.

When you shop around with insurance specialists, you can compare insurance rates and find great rates, and even protection from having your rates go up. For example, some companies offer accident forgiveness and safe-driving programs. This will waive an accident if you’ve had a great driving record.

If you’re involved in multiple accidents, however, your insurance rates will go up. When you’re in an accident, file a claim, and then your claims adjuster will conduct a car insurance inspection. This inspection determines the amount of damage from the accident and how it can impact your insurance rates.

Not-Your-Fault Accident

You may be wondering, what if the accident isn’t my fault? Do my rates still increase?

Yes, unfortunately, your rates may still increase even when the accident isn’t your fault. On the positive side, though, they won’t increase as much as they would if the accident wasn’t your fault. You may see your rates go up by as much as four percent when the accident isn’t your fault.

Some states protect the driver who isn’t at fault and will not allow insurance companies to raise rates on drivers that aren’t at fault. So again, the rates you pay depend on where you live.

When Will Rates Go Down?

You will see your car insurance rates go down after time if you have a good driving record. Usually within three to five years rates will begin to drop a little. The more time that passes with no accident or marks on your driving record, the lower your rates will drop.

There is no set timeframe for when insurance rates go back down after an accident. But the general rule of thumb is that the longer it has been since you were involved in an accident and filed a claim, the lower your rates will be.

So, immediately after the accident, your rates will spike. Then after that three-to-five-year waiting period, they will slowly decline. You need to have a good driving record for this to happen though. This means you cannot file another claim during that period.

If you file another claim after your accident, you will see your rates increase even more. Some insurance companies may even drop you if you file too many claims because they see you as too big of a risk.

How to Lower Your Car Insurance Rates After an Accident

Fortunately, you can do a few things while you’re waiting for the insurance rates to magically lower that could speed up the process. Several factors play into your insurance rates, so you need to try a few different things to see if you can get your rates to drop.

Shop Around

The insurance company you pick determines your rate increase and decrease. So shop around a little to see if you can find a company that offers you a better deal. Do some research into companies and see what specials they’re running.

Adjust Your Deductible

Your deductible is the amount you pay out of pocket before the insurance kicks in. So when you’re in a car accident, if you have a $500 deductible, this means you pay $500 for the damages, and your insurance company pays the rest.

If you have a high deductible, your insurance premium, or the monthly amount you pay, will be less. Look into how much less you’ll pay per month if you adjust your deductible.

If you opt to raise your deductible, make sure you have an adequate amount of money in savings should you have a car accident. You need to be able to pay your deductible. Otherwise, you’ll find yourself unable to repair a damaged car.

Lower Your Coverage

The amount you pay for insurance depends heavily on the coverage you have. If you have a heavy amount of coverage, you’ll pay a higher premium. If you lower your coverage amounts, then you can lower your premium.

Each state has a minimum coverage requirement. Make sure you have the minimum requirements.

Raise Your Credit Score

If you have good credit, some insurance companies lower your premium. Thus, try to raise your credit score. You can do this by doing a few different things.

Begin by paying down your revolving credit. Do you have a credit card with a constant balance? If so, pay down this credit card.

Focus on paying all of your bills on time if you’ve struggled with this in the past. Also, do not take out any new credit cards while you’re trying to lower your score.

These few things can help lower your score and lower your insurance premium.

Why Do Rates Go Up?

Insurance providers raise their rates to protect themselves, not to punish you. The powers that be in the insurance company use a formula to determine the rates, and this formula includes the new data after you’ve had a collision.

The insurance company takes all of the data from the accident into consideration. They look at all the factors that contribute to your likelihood of being in an accident.

This data includes where you live, such as if you live in an urban or rural area. It also includes your age, how long you’ve been driving, if you have had a history of accidents, if you have had speeding tickets or moving violations, and a variety of other things.

Then the company determines your premium based on the likelihood of you being in an accident and them having to pay out for your accident. So the more likely you are to be in an accident, the higher your premium will be.

Conversely, if you can prove that you’re low risk, the insurance company will not require as much of a premium.

Each company factors risk a little differently. This is why you’ll see lower premiums with different companies. It’s worth looking at several insurance companies, thus, to find the best deal for your particular situation.

Accident Forgiveness Programs

Some companies have accident forgiveness programs. Most companies design accident forgiveness programs to waive the premium increase with your first accident. They will typically waive only one accident every three to five years, or the time that you’d have to wait to see your premium go down.

Typical accident forgiveness programs are an add-on to policies, costing the policyholder a bit more. Some companies will reward their drivers that have a good record with free accident forgiveness coverage.

Take Note, and Take Action

Without any extra action, you will see an increased cost in your car insurance after an accident. You will see a much greater increase if you’re at fault than if you’re not at fault. However, you may still see a small increase even if you didn’t cause the accident.

You also can do a few things to lower your insurance rates, even after a car accident. More than anything, though, you can shop around and find the insurance company that will work best with you, despite your past driving record.

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