Your car insurance can go up by as much as 20% to 50% after an at-fault auto accident. Many states regulate auto insurance rate increases and require prior approval before hiking rates. Many states also prohibit insurance companies from hiking rates after an accident that is not your fault, but specifics differ.
You can talk to a car accident lawyer if you have more specific questions about insurance rate hikes after an accident.
Average Rate Increase After an At-Fault Accident
When you get into an accident that is your fault, your insurance company will increase your rates after a claim. In most cases, you can expect your premiums to jump between 20% and 50% after a crash. That comes out to a jump of between $400 and $1,000 in higher premiums per year.
Factors that can impact the magnitude of the rate increases include the following:
- The severity of the accident. The more damage the accident caused, the higher the rate hikes.
- Accident history. Subsequent accidents can result in progressively higher rate increases.
- Criminal violations. Criminal violations, like speeding or DUIs, can result in higher rate increases.
- Causing serious harm or death. The most drastic rate increases can occur if you cause an accident resulting in serious bodily harm or death.
- Making a comprehensive claim. Comprehensive insurance claims for vehicle and body damage can increase your rates, though not as much as an at- fault accident would.
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Why Do My Insurance Rates Go Up After an Accident?
Your insurance rates go up after an accident primarily to account for the additional risk of coverage. The more accidents you cause, the insurance company sees you as a riskier person to insure. The increased premiums are meant to cover the losses the insurance company incurred by having to pay out after the accident.
Insurance claims may also trigger additional fees to compensate the insurance company for its adjusters’ time and related fees. The insurance company can increase your rates to account for these additional expenses.
Rules About Insurance Rate Increases
Insurance companies can raise rates after an accident, but things are not a free-for-all. Most states regulate exactly when and how much auto insurers can increase their rates. The exact specifics differ from state to state, but here are some general rules that may be applicable:
- Most states require insurance companies to provide written notice before hiking rates. The notice must explain the new rate and the reasons for the increase.
- Rate hikes generally must take place at the beginning of a new policy period and not in the middle of a current one.
- Car insurance companies typically have standardized surcharges that define how much your rate will increase after a specific event.
- Some states limit how long an insurance company can add a surcharge to your policy after an event.
If you are unsure about the specific rules in your state, you can talk to a knowledgeable personal injury lawyer.
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How Soon Do I Have to Notify My Insurer of an Accident?
Ideally, you should notify your insurer of an accident within 48 or 72 hours. Most policies have a specific, defined reporting timeframe and require you to report accidents even when you’re not at fault. If you try to hide an accident or fail to report it to your insurance company, it could result in the cancellation of your policy and loss of premiums.
Will My Rates Increase When I’m Not At Fault?
Many states have laws that prevent auto insurers from raising your rates when you’re not at fault for an accident. For example, in Colorado, CRS 10-4-628 explicitly prohibits insurers from raising rates or reducing auto coverage when someone is in an accident that’s not their fault.
Similarly, Minnesota prohibits insurance providers from raising rates when you make a no-fault claim, and you’re less than 51% at fault for the crash. However, many states have no such laws, so insurers can raise rates after an accident that wasn’t your fault.
Can My Rates Go Down If I Stay Accident-Free?
Yes, your auto insurance premium rates can go down if you stay accident-free. If your state limits insurance surcharges after at-fault accidents, your rates may fall after the surcharge period ends.
Alternatively, many insurance companies offer accident forgiveness or have a claim value floor for rate increases. These rules depend on the specific insurance company and may be subject to change depending on the insurer.
Contact a Car Accident Lawyer Today
Whether or not your rates go up after an accident depends on several factors unique to the case. If you have any more questions about insurance rates increasing after an accident, you should give us a call at Postman Law.
We have recovered over $3 billion for clients and bring decades of combined experience to your case. Our knowledgeable personal injury lawyers can provide answers and a free consultation.