Understanding Average Rate Increases After an Accident

When you're involved in an at-fault accident, you can expect your car insurance premiums to increase significantly at your next policy renewal. The national average increase ranges from 43% to 45%, though this can vary considerably based on multiple factors. In dollar terms, most drivers with full coverage will pay an additional $800 to $1,200 annually after an at-fault accident.

The severity of your accident plays a crucial role in determining the exact increase. Minor fender-benders with minimal property damage typically result in increases on the lower end of the spectrum—around 20% to 30%. However, more serious accidents involving injuries or substantial property damage can push your rates up by 50% or more. Some drivers in states like California have reported increases as high as 97% for accidents involving bodily injuries.

For perspective, if you're currently paying $1,800 per year for full coverage and have an at-fault accident, you could see your annual premium jump to approximately $2,600—an increase of $800. These elevated rates typically remain in effect for three to five years, meaning you could pay an additional $4,000 or more over the lifetime of the incident on your record.

Key Factors That Determine Your Rate Increase

Not all accidents result in the same insurance premium increase. Several important factors influence how much your rates will go up, giving you some insight into what insurers consider when recalculating your policy costs.

Degree of Fault

The most significant factor is whether you were at fault for the accident. At-fault accidents almost always result in substantial premium increases, while not-at-fault accidents may result in minimal or no increase depending on your insurer and state regulations. However, some insurance companies still raise rates by approximately 10% even for not-at-fault accidents, viewing any accident involvement as an indicator of elevated risk.

In California and some other states, regulations prevent insurers from raising your rates if you're 50% or less at fault for an accident. Understanding your state's specific regulations can help you better anticipate the financial impact.

Accident Severity and Claim Amount

Insurance companies closely examine the total cost of your accident, including vehicle repairs, medical expenses, property damage, and legal fees. A minor accident with a claim of $1,500 will have a far smaller impact on your premiums than a serious collision with $30,000 in damages. The higher the payout your insurer makes, the more they'll view you as a financial risk going forward.

Your Driving History

Your prior driving record significantly influences how much your rates increase after an accident. Drivers with clean records who experience their first accident typically face more lenient increases than drivers with multiple violations or previous accidents. Best auto insurance companies review three to five years of your driving history when reassessing your risk profile.

Insurance Company Policies

Different insurance carriers have vastly different approaches to post-accident rate increases. Some insurers are more forgiving than others, which is why shopping around after an accident can save you hundreds of dollars. For example, research shows that State Farm customers with accidents pay an average of $304 in additional annual premiums, while Progressive customers face an average increase of $1,168—nearly four times higher.

Geographic Location

Your state and even your specific city can dramatically affect how much your insurance increases after an accident. State regulations vary widely, with some states imposing strict limits on rate increases while others give insurers more flexibility. Additionally, areas with higher accident rates or more expensive repair costs tend to see larger premium increases.

How Long Will Your Rates Stay High?

Understanding the timeline of post-accident rate increases is essential for financial planning. The good news is that these increases aren't permanent, though you'll need patience as you wait for the accident to age off your record.

Duration on Your Driving Record

An at-fault accident typically remains on your insurance record for three to five years, depending on your state and insurance provider. In most cases, including California, accidents stay on your driving record for three years. However, certain aggravating factors can extend this timeline to ten years, including:

• DUI or DWI convictions related to the accident
• Hit-and-run incidents
• Accidents involving commercial vehicles
• Accidents resulting in serious injuries or fatalities

Your insurance company will continue to factor the accident into your premium calculations for as long as it remains on your DMV driving record. Once the accident falls off your record, your rates should decrease accordingly, assuming you maintain a clean driving record during that period.

Timeline for Rate Decreases

Most drivers notice their premiums begin to gradually decrease after the first year following an accident, provided they don't have any additional violations or accidents. Research shows that average monthly premiums drop from $161 less than one year after an accident to $108 after seven to ten years—demonstrating the long-term benefit of maintaining a clean driving record.

Your rates will typically return to your pre-accident levels once the incident is removed from your record, though other factors like inflation, changes in your location, or updates to your vehicle may still affect your overall premium.

Comparing Company-Specific Timelines

While most insurers follow the three-to-five-year rule, some companies offer programs that effectively shorten this timeline. Accident forgiveness programs, for instance, prevent your first accident from ever impacting your rates. Additionally, some insurers offer vanishing deductibles or safe driving rewards that can help offset the financial impact sooner.

Strategies to Minimize Rate Increases and Save Money

While you can't avoid an accident once it's happened, you can take proactive steps to minimize the financial impact on your insurance premiums. These proven strategies can help you save hundreds or even thousands of dollars over the years following an accident.

Shop Around for New Quotes

This is the single most effective strategy for reducing your post-accident insurance costs. Even after a claim, different insurers will offer dramatically different rates. Some companies specialize in working with drivers who have accidents on their record and offer more competitive pricing. Request quotes from at least three to five different carriers, including both national and regional insurers.

Don't assume your current insurer offers the best rate just because you've been a loyal customer. While some companies reward loyalty, others may increase rates more aggressively for existing customers than they would for new ones.

Take a Defensive Driving Course

Many insurance companies offer discounts of 10% to 20% for drivers who complete an approved defensive driving or driver education course. These courses, available both online and in-person, demonstrate your commitment to safer driving and can partially offset your post-accident rate increase. Some states even require insurers to offer these discounts, making it a guaranteed way to save money.

The courses typically cost between $25 and $100 and take four to eight hours to complete. Given that you could save several hundred dollars per year on your premium, the return on investment is substantial.

Adjust Your Coverage and Deductibles

Raising your car insurance deductible from $250 to $500 or $1,000 can reduce your collision and comprehensive premiums by 15% to 30%. While this means you'll pay more out of pocket if you have another accident, it can significantly lower your annual costs in the meantime.

You might also consider adjusting your coverage limits or removing optional coverages if your vehicle has depreciated significantly. However, be cautious about reducing liability coverage below recommended levels, as this could leave you financially vulnerable in a future accident.

Maximize Available Discounts

After an accident, it's more important than ever to take advantage of every discount your insurer offers. Common discounts that can help offset your rate increase include:

• Bundling policies (home and auto together) for up to 25% savings
• Paperless billing and autopay for 3% to 5% off
• Multi-vehicle discounts for insuring multiple cars
• Good student discounts for young drivers maintaining good grades
• Low mileage discounts if you drive fewer than average miles annually
• Safety feature discounts for vehicles with advanced safety technology

Contact your insurance agent to review all available discounts and ensure you're receiving every reduction you qualify for.

Consider Accident Forgiveness Programs

If you haven't already had an accident, enrolling in an accident forgiveness program before an incident occurs can save you thousands of dollars. These programs prevent your first at-fault accident from increasing your rates, effectively neutralizing the financial impact.

Major insurers offering accident forgiveness include Progressive, State Farm, Nationwide, Liberty Mutual, Allstate, and GEICO. Availability varies by state, and some insurers offer it as an automatic benefit for long-term customers, while others charge an additional fee. Progressive even offers "Small Accident Forgiveness" for new customers, covering claims under $500.

Improve Your Credit Score

In most states, insurance companies use your credit-based insurance score to help determine your rates. Improving your credit score by paying bills on time, reducing debt, and correcting errors on your credit report can help lower your premiums over time, partially offsetting the accident-related increase.

Frequently Asked Questions

Will my insurance go up if I'm not at fault for an accident?

It depends on your insurer and state regulations. While many companies don't increase rates for not-at-fault accidents, some still raise premiums by approximately 10% because they view any accident involvement as an indicator of higher risk. States like California have laws preventing insurers from raising rates if you're 50% or less at fault. Always check your policy details and state regulations to understand how your insurer handles not-at-fault accidents.

How much does insurance go up after hitting a deer or animal?

Hitting a deer or other animal is typically covered under comprehensive coverage and is considered a not-at-fault incident. Most insurers won't increase your rates for comprehensive claims unless you file multiple claims within a short period. However, policies vary, so it's worth confirming with your insurance company. If you're concerned about a rate increase, you might consider paying for minor damage out of pocket rather than filing a claim.

Can I avoid reporting a minor accident to my insurance company?

If you pay for the damages out of pocket and all parties agree not to involve insurance, you may be able to avoid reporting a minor accident. However, this approach carries risks. If the other party later files a claim or injuries emerge after the fact, you could face serious complications. Most experts recommend always filing a police report for accidents involving more than minor damage and notifying your insurer, even if you don't file a claim immediately. Failing to report an accident when required by your policy could result in coverage denial.

Does accident forgiveness cover all types of accidents?

Accident forgiveness typically covers your first at-fault accident, preventing it from increasing your rates. However, it doesn't eliminate all consequences. You'll still need to pay your deductible, the accident will remain on your driving record, and your insurer will still process the claim. Additionally, if you switch insurance companies, the new insurer may count the accident when setting your rates since they're not bound by your previous company's accident forgiveness agreement. Some programs also reset after a certain period, allowing the benefit to apply to future accidents.

Is it worth filing a claim if my deductible is high?

Whether to file a claim depends on the cost of repairs compared to your deductible and potential rate increase. If the damage is only slightly more than your deductible—say, $800 in repairs with a $500 deductible—you'd only receive $300 from your insurer. Given that your premiums might increase by $800 to $1,200 annually for three to five years, you could end up paying significantly more in higher premiums than you'd receive from the claim. As a general rule, consider paying out of pocket for accidents where repairs cost less than 1.5 to 2 times your deductible.