Every auto insurance company has their own unique policy regarding accidents and how they affect your car insurance rate. Generally though, the criteria for a rate hike include:

  • Whether or not you were at fault
  • If you were at fault, if negligence on your part was a factor
  • Whether you received a ticket related to the accident such as speeding or running a red light

Insurance companies use what is known as a surcharge schedule to determine how much your rate will increase. Each company has their own schedule and includes their own factors for determining the rate surcharge but generally you may see a 20% to 40% increase after an at-fault accident. If your premium is $1000 you may see it increase to as much as $1200-$1400 per year.

Previously Filed Claims

If you have filed previous claims, especially in a short period of time, your insurance company may decide that you are a high risk driver and increase your rate, or worse, drop you completely. They believe their future losses will be greater with you because of your history of filing claims.

The type of claim you file can also make a difference. If you file a comprehensive insurance claim your rates may not see a jump. For instance, if you file for hail damage or some other natural disaster your rate may not be affected. However, if you file under collision you may see a rate increase.

Accident Forgiveness

Some companies are now offering what is known as Accident Forgiveness to some of their customers. If you have a lengthy and clean driving history the company may well let the first one slide. This is a great marketing tactic and can be a great money saver if you are a good driver who just had a fluke accident.

How Long Do Accidents Stay On My Record?

Car insurance companies differ on the amount of time they will factor an accident into your premium. Anywhere from 6 to 48 months is possible. Check with your insurance company to find out their policy.

Also, beware that if you have 3 or more at-fault accidents in a relatively short time period, generally 24 to 36 months, you may be dropped by your car insurance company. A cancellation of this sort can be devastating to your finances as you will be charged higher rates for having a policy cancelled by another company.

The bottom line? Drive responsibly and safely and avoid accidents as best as possible to avoid paying high insurance premiums.