A car accident brings with it a lot of uncertainties, both health wise and financially. You’ll have to worry about your recovery journey, how to offset your losses and the future financial implications. You might recover from your physical injuries soon enough, but financially, it will take longer.
Some of the financial implications that come with a car accident are the insurance premiums. Whether you’re at fault in an accident or not, your insurance premiums will increase.
However, for non-fault claims, your insurance premiums won’t go up compared to when you’re the one at fault.
Let’s look at how much car insurance claims affect your insurance premiums and how much they will go up.
Will a Car Accident Affect My Insurance Cost?
When you cause an accident, your insurance premiums will go up. This is because most insurance companies will see you as risky to insure and want more money from you to offset the risk. For this reason, your insurance premium will go up by a certain percentage, depending on your policy.
There’s no general amount set for increasing your insurance cost after an accident. The cost will go up depending on several factors, such as your insurer, vehicle type, geo-location, driving record, and claims history.
For instance, if you have a bad driving record and have made several claims before, your insurance cost will go up by a huge margin.
To understand how insurance premiums work for your specific situation, ask your representative. They’ll be able to explain your policy and any possibility of your premium going up and by how much.
Fault and Non-Fault Insurance Claim
While your insurance premiums will likely go up after an accident, your fault will determine how much it does. If you were the one who caused the accident, it would be recorded as a fault. In this case, your premiums will go up since your insurance company will deem you risky to insure.
If your insurance provider can’t find anyone to blame for the accident, they’ll put the fault on you. For example, if your car is vandalized, you probably won’t find the guilty parties. Your insurance will have to pay for the damage, and that will increase your premiums.
Non-fault insurance claim works when the fault in an accident lies with someone else. For example, if another vehicle rams into your car when it’s parked, the fault will clearly be of the other driver.
If the other driver’s insurance pays all the costs of repairing your vehicle, your insurance will record that as non-fault.
However, if your insurance company still has to pay some money to cover the repair costs, they’ll consider it your fault. If this is the case, then the cost of your insurance will increase. The amount will depend on your state and the insurance firm.
Will My Car Insurance Cost Increase If I’m Not at Fault?
The answer to this question can be yes or no, depending on different circumstances. If the at-fault party completely covers the damage, your insurance company will not have to pay anything. In that case, they will not increase your premiums.
However, if your insurance company has to cover even a fraction of the cost, they might increase your premium rate. This also depends on the laws of your state and your specific insurance company.
For example, others might not increase your insurance premiums as long as the accident involves the following circumstances:
- You got into a hit-and-run accident.
- Your car was hit while parked.
- Another vehicle hit your car in the rear, and you were not guilty of any traffic violations.
While all the above circumstances show that you were not at fault for the accident, you must also provide proof to convince your insurance firm. Some documents that can help prove your innocence include:
- A police report
- The other driver’s insurance offered a statement to accept the fault.
- The other driver attesting to a fault in a written statement.
- A legal statement showing that you were paid for the damage.
Another instance where your premiums won’t increase even if you’re at fault is when you have comprehensive insurance. Comprehensive insurance covers you for damages that result from collisions with animals or falling objects.
While they’ll not affect your premiums, the insurers will still record your claims history, and this can also have an impact in the future.
How Long Will the Rate Increase Last?
This is generally the time your insurer will consider you a risky client. The duration can be calculated from the time you made your last claim. It mostly takes three to five years.
If you make a claim today, you’ll have to pay an increased premium for the next three years. If you make another claim before the three years are over, the duration will reset to another three years.
This duration will also depend on your insurance provider and your state. In some states, the increased premiums will only last three years, while others allow up to five years.
Other states and insurers will also decrease your premiums every year you drive without causing an accident.
How Can I Prevent My Insurance Rates from Going Up?
You can prevent your insurance premiums from going up if you enroll in a forgiveness program. If you have such programs prior to your accident, they will waive your premiums for the first at-fault accident. These programs only waive one accident for a specified period, say three years.
You might also consider negotiating with your insurance company if you’ve been with them for a long time and have no accident history.
If you convince them, you might benefit from a free forgiveness program. Remember, this might not work for new customers or new drivers.
Bottom Line
The cost of insuring your car will surely increase if you get into an accident. If you have a poor driving history and are always at fault, your premium will increase. Insurance companies will consider you a risky driver and want to charge more to insure you.
The only way to get out of this is to maintain a good driving record and enroll in a forgiveness program. You can also lower your premiums by looking for discounts and improving your credit-based insurance score.
