Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 13, 2021

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Insurance Q&A: “How much does insurance go up after an accident?”

Doesn’t it feel like we’re already paying too much for car insurance? Well, throw in an accident and you’ll likely feel even more ripped off.

Receiving speeding tickets and getting into accidents will very likely lead to an increased insurance premium. But how much?

Well, there is no magic, pre-determined, dollar amount increase we can quote you. That would be too easy…and insurance is generally quite a bit more complicated than that.

But here are some thinking points that may help you gauge where your auto insurance premium will “land” as a result of your accident.

What type of accident was it?

Is your (or the other guy’s) car totaled? Any bodily injury or just physical damage? Were you found “at fault?” The answers to these questions will certainly determine your policy premium increase.

Serious Accident

A good rule of thumb is that you can expect to see a 10% premium increase if you file a sizable insurance claim as a result of an accident that was your fault.

File more than one accident claim and you can expect to see more than one increase. There is no limit to the number of rate increases you’re subjected to if you file claims for multiple at-fault accidents.

Your auto insurance policy can be cancelled or non-renewed in the event your claim resulted from “gross” negligence. Yep, you guessed it. Get a DWU/DUI as part of the accident and you may be in deeper than a few extra bucks. High-risk drivers have to file special insurance forms and see significantly higher rate increases.

Fender Bender (Collision)

You might get away with this one all together. Bump your car into a pole at the gas station to the tune of $200 (after auto insurance deductible) and you may not see any increase…or just a few bucks overall. In fact, this kind of scenario is where the experts with the Insurance Information Institute (III) say optional coverage like collision comes in handy.

You may ask yourself if it’s worth filing the auto insurance claim for minor accidents with little to no damage. If the cost to repair your cracked headlight doesn’t exceed your deductible, you won’t see any money from the insurer.

Hail Damage (Comprehensive)?

Many insurers aren’t going to count a comprehensive claim against you, but it varies from company to company. It doesn’t matter if you have one or one hundred cracked windshields, your insurer may simply pay those out.

Also, you shouldn’t see any additional premium hikes for towing, rental or roadside assistance coverage claims either.

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When does the rate hike take effect?

The good news is that an insurer cannot raise your premium mid-term.

If you have an accident on the first day of your new policy, you won’t see an increase, if any, until the policy renews.

Additionally, you can expect to have accidents “held against you” for as long as five years, although most insurers are only concerned with your last three years of driving activity.

How do they know?

Insurers are going to look at your motor vehicle record (MVR) and C.L.U.E report to get your citation and accident history.

Of course, any “issues” that weren’t reported to the insurance company will not show up on these reports.

An example would be you repairing your own car after backing into a brick mailbox. If you didn’t file the insurance claim…it’s not going to show up in your claims history or anywhere else.

What factors affect your auto insurance rates?

Your driving record is always going to be a major factor when it comes to your auto insurance rates. Auto insurance carriers will also consider your age, gender, marital status, location, and credit score (though there are a few states that have made it illegal for insurance companies to factor in credit score). These personal factors help the insurer to determine your risk level.

Your coverage levels will also be factored into your auto rates. If you purchase only the minimum coverage requirement, you’ll pay a lot less for your premium, but you’ll be paying for your own repairs and injuries after an accident.

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What can you do?

First of all, make sure to get a police report for any accident you’re involved in, especially in cases where you were not the at-fault party. This is proof that you were not to blame.

If you want to avoid an insurance premium increase after a car accident, you may want to look into accident forgiveness.  Essentially, you’re paying to “insure” your insurance upfront.

We know it sounds silly, but if you get into an accident, you could save some serious money with an accident forgiveness program and avoid being “dropped” as a result of an accident.

It also may not hurt to consult with a car accident lawyer, especially if legal issues surrounding fault or even injury arise.

There’s also ticket forgiveness if you happen to get caught speeding a lot.

What’s the bottom line?

Getting into an at-fault accident will result in a premium hike, but a no-fault accident should not. Drivers with a clean record will always have an easier time finding cheap car insurance compared to those with tickets and accidents.

If you don’t have a clean driving record, ask your insurance provider if you’re entitled to any discounts. While you may not be eligible for a safe driver discount, most of the largest insurers also offer good student discounts, multi-policy discounts, discounts for vehicle safety features or taking a defensive driving course, and a lot more.

You should also shop around for the lowest rate by gathering insurance quotes online and/or visiting an independent insurance agent to discuss your options.