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: Jan 19, 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 premium will “land” as a result of your accident.

What Type of Accident?

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 claim and you can expect to see more than one increase. There is no limit to the number of increases you’re subjected to if you file multiple claims.

Your 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. You may end up in a state assigned risk policy pool. Ouch!! Very expensive.

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.

You may ask yourself if it’s worth filing the claim if you don’t have a decent amount of 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 comprehensive claims against you. 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 claim…it’s not going to show up.

What You Can Do

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 and avoid being “dropped” as a result of an accident.

There’s also ticket forgiveness if you happen to get caught speeding a lot…so shop around by gathering insurance quotes online and/or visiting an independent insurance agent!