money

How Much Does Car Insurance Go Up After an Accident?

Have you recently been in a traffic collision? If so, you are probably wondering how that might affect your auto insurance premiums going forward. Here is what you can expect.

Our Experienced Car Accident Lawyers Can Help with Your Collision Claim

If you suffered injuries in a car crash that someone else caused, you should not have to pay for the consequences. The experienced Chicago car accident lawyers at Salvi Schostok & Pritchard P.C. have recovered over $3 billion in verdicts and settlements for injured clients. You can trust us to use our skills and 40+ years of experience to handle your case effectively.

Here are just a few of the recoveries we’ve achieved on behalf of people like you:

  • $33.2 million for a 22-year-old man injured by a drunk driver
  • $5.5 million for a man who was injured when a tow truck hit the semi he was riding in
  • $3.5 million for a man who was struck by a UPS truck

If you have been injured in a traffic collision, contact us immediately. We can negotiate aggressively with the at-fault party’s insurance provider to secure full and fair compensation for your losses, all while safeguarding your insurance rights.

Key Takeaways: Accident Impact on Insurance

  • Average Cost Increase: According to Forbes data, drivers can expect an average annual premium increase of $740 following an at-fault accident.

  • Percentage Hike: Major insurers typically raise rates between 21% and 73% depending on the severity of the claim.

  • Not-at-Fault: Generally, accidents where you are not liable do not increase your rates, though exceptions exist based on claim frequency.

  • Duration: Surcharges typically remain on your policy for 3 to 5 years.

How Insurance Premiums Are Determined

Car insurance companies are for-profit businesses that make their profits by collecting more in premiums than they pay out in claims. Because auto insurance companies must pay out claims when their policyholders cause crashes, they are motivated to identify riskier drivers and charge those drivers higher premiums to offset the cost of insuring them.

Here are some risk factors that affect auto insurance rates, according to the National Highway Traffic Safety Administration:

  • A driver’s crash and claims history
  • A driver’s driving record, including any moving traffic violations
  • A driver’s age, as younger drivers are involved in a disproportionate number of collisions
  • A driver’s gender, as male drivers are 40 percent more likely than female drivers to be involved in injury collisions
  • A driver’s location, as certain states have more expensive insurance rates

How does a driver’s prior driving record influence the premium increase?

Your past driving history significantly affects how much your insurance goes up after an accident. Insurance companies analyze your record to calculate the probability of future risk. They assess previous crashes, the frequency of past claims, and traffic violations. If you have a clean record, the increase may be moderate; however, if you have a history of infractions, your rates could increase substantially as you are categorized as a “high-risk” driver.

How Collisions You Caused Can Affect Your Car Insurance Rates

Insurance increases after a car crash because it costs the insurance company money to pay claims. Insurers operate on the logic that past behavior predicts future risk. If you cause a crash, they view you as more likely to cause another. To cover this increased risk, the insurance carrier applies an insurance surcharge to your premium. This surcharge is the specific mechanism that results in a higher monthly or annual bill.

What factors determine the specific amount of an insurance premium increase?

The magnitude of a rate hike depends heavily on the severity of the incident and the laws of your specific state.

Minor vs. Major Accidents

While a minor fender bender results in a lower surcharge, major accidents trigger the steepest increases. A “major” accident typically involves:

  • Substantial Property Damage: Totaling a vehicle or causing significant structural damage.

  • A Bodily Injury Claim: If the accident results in physical harm to another party, requiring the insurer to pay a bodily injury claim for medical expenses, the premium increase is almost always significantly higher than for property damage alone.

State and Frequency Data

The increase varies by location and frequency. For example, data indicates that while a first at-fault accident might raise rates by 40% on average, a second at-fault incident can cause premiums to nearly double in many states. Furthermore, strict liability states may have higher baseline increases compared to others.

The Role of Your Deductible

When deciding whether to file a claim for a minor accident, you must consider your deductible amount. If the cost of repairs is only slightly higher than your deductible (e.g., repairs cost $700 and your deductible is $500), filing a claim may not be financially sound. The small payout ($200) would likely be outweighed by the subsequent insurance surcharge applied to your premiums over the next several years.

Frequently Asked Questions About Insurance Rates After Car Accidents

How much, on average, does car insurance increase after an at-fault accident?

If you cause a car accident, your car insurance payments usually go up because insurance companies see you as a higher risk. Forbes found that major insurance companies raise rates by 21% to 73%, with payments going up by $740 per year on average. The exact figure depends on the claim severity and your insurer’s rating system.

Do minor accidents lead to smaller increases than major ones?

Yes, small accidents usually cause smaller car insurance price increases than bigger ones. Fender benders with low repair costs often lead to smaller rate hikes compared to accidents involving a bodily injury claim or a totaled vehicle.

How long do these increased insurance premiums typically last after an accident?

This varies by state and insurer but typically ranges from three to five years. The surcharge does not disappear immediately; instead, your rate is usually re-evaluated during your annual or semi-annual policy renewal. During this period, the insurer reviews your recent driving history to determine if the surcharge should remain, decrease, or be removed entirely.

What about Accident Forgiveness?

To manage or lower car insurance price increases after an accident, drivers can look into accident forgiveness programs. These programs vary by company but generally work in one of two ways:

  • As a Reward: Automatically included for customers who have been with the company for several years without collisions.

  • As an Add-On: An optional feature drivers pay an extra fee to include.

Read the fine print to understand the eligibility criteria of your policy’s accident forgiveness program.

How Car Collisions Caused By Others Can Affect Your Car Insurance Rates

Generally, you will not see a rate increase after a crash for which you are not at fault. Insurance companies assess risk and responsibility when determining premiums, and things outside your control should not affect the cost for them to insure you. This includes situations like:

However, it is important to note that there can be exceptions. For instance, if you are frequently involved in crashes, even if you were not at fault, some insurers may consider you a higher risk and adjust your premiums accordingly.

Why It’s Important to File an Insurance Claim After an Auto Collision

You should still file a claim even if you are afraid your insurance rates might increase after a crash. Filing a claim ensures you utilize the protection and coverage you pay for. Depending on its terms, your policy could cover repairs, medical expenses, and other costs associated with the incident. You may also have a contractual obligation under the terms of the policy to report any collision to your insurance provider.

Do not jeopardize your rights. File an insurance claim, ideally with the help of an experienced attorney. They can determine if the other driver was to blame and help you seek compensation for your medical bills, lost wages, property damage, and more.

The legal team at Salvi, Schostok & Pritchard P.C. wants to help you seek justice after a car crash. Contact us today for a free consultation with our Illinois car crash lawyers.