Sunday, November 18, 2018

How much does insurance go up after an accident?

How much does insurance go up after an accident?
Car insurance rates go up 31 percent, on average, after one at-fault accident with more than $2,000 in damage, or by $450 a year, rate data show.

Here's how much car insurance goes up for common accident claims:
Accident claim Average Percent Increase Average Dollar Increase
1 At-fault property damage accident over $2K 31% $450
1 At-fault property damage accident under $2K 26% $366
1 comprehensive claim for over $2k 3% $39
1 comprehensive claim for under $2k 3% $39
2 At-fault property damage accident over $2k 110% $1,572
2 comprehensive claims for over $2k 8% $121

However, there are many factors that come into play, so like with most car insurance situations, your rate after an accident may be a bit higher or lower, depending on your particular situation. Whether you’re at fault or not at fault in an accident, changes in your rates vary by insurance company and by state, says Penny Gusner, consumer analyst for

In addition to worrying if your rate will increase, you may also wonder what to do after an accident. It’s wise to exchange the following information with the other driver: name, name of car owner, names of passengers, vehicle make, model and license plate number and the insurance company name, policy number and number for claims filing. Call the police, and if possible, get a police report.

How much does an at-fault accident raise your rates?

An accident where you're blamed makes pricier premiums much more likely, but not in every situation with every company, Gusner says, which is why it’s prudent to shop for the best rates by doing a car insurance comparison.

"One at-fault accident could raise your rates anywhere from 12 percent to 80 percent, depending on the severity -- or not at all," she says. "Some insurers will let one minor accident slide. However, if the crash and resulting claim isn't being surcharged (where your base rate is raised), you may still pay higher rates due to losing any good driver discount you received for keeping a record clean of violations or accidents."

Have a second at-fault accident and your premiums will probably skyrocket. "That most certainly will hike up your rates," Gusner says. "How much varies greatly again but our rate data show that policy-holders can expect an average jump anywhere from 69 to 180 percent."

Enter your state in the search field in the table below to see the hike after a claim for one at-fault accident over $2,000 for your state. Drivers in Minnesota, California, Louisiana and Michigan get hit with the highest increases, while those in New York, Hawaii, South Carolina and Alaska see the lowest, compared to the rest of the country.

Average car insurance rate increases for one at-fault accident in every state

State Average rate Rate after accident % increase $ increase
Minnesota $1,339 $2,503 87% $1,164
California $1,783 $3,081 73% $1,298
Louisiana $2,228 $3,348 50% $1,120
Michigan $2,368 $3,502 48% $1,134
Delaware $1,838 $2,592 41% $754
North Carolina $1,170 $1,647 41% $477
Georgia $1,815 $2,552 41% $737
Utah $1,212 $1,699 40% $487
Texas $1,644 $2,301 40% $657
Maryland $1,541 $2,154 40% $613
Iowa $1,073 $1,479 38% $406
Nevada $1,578 $2,169 37% $591
Oregon $1,325 $1,801 36% $476
Florida $2,250 $3,045 35% $795
Alabama $1,304 $1,764 35% $460
Washington $1,307 $1,766 35% $459
Wisconsin $1,147 $1,531 33% $384
West Virginia $1,467 $1,934 32% $467
Connecticut $1,980 $2,589 31% $609
Colorado $1,675 $2,190 31% $515
South Dakota $1,250 $1,634 31% $384
Tennessee $1,339 $1,750 31% $411
Illinois $1,176 $1,523 30% $347
DC $1,887 $2,438 29% $551
New Hampshire $1,156 $1,493 29% $337
Rhode Island $2,011 $2,591 29% $580
Arkansas $1,556 $2,001 29% $445
Nebraska $1,287 $1,640 27% $353
Idaho $1,019 $1,294 27% $275
Pennsylvania $1,438 $1,824 27% $386
Virginia $993 $1,250 26% $257
New Mexico $1,498 $1,852 24% $354
Wyoming $1,577 $1,938 23% $361
Mississippi $1,504 $1,844 23% $340
Missouri $1,288 $1,576 22% $288
Kansas $1,412 $1,725 22% $313
Ohio $959 $1,170 22% $211
Arizona $1,399 $1,702 22% $303
Oklahoma $1,469 $1,783 21% $314
Vermont $1,166 $1,405 20% $239
Maine $884 $1,058 20% $174
New Jersey $1,419 $1,697 20% $278
North Dakota $1,123 $1,338 19% $215
Indiana $1,057 $1,259 19% $202
Kentucky $1,611 $1,915 19% $304
Montana $1,589 $1,877 18% $288
Massachusetts $1,616 $1,893 17% $277
Alaska $1,246 $1,458 17% $212
South Carolina $1,353 $1,559 15% $206
Hawaii $1,255 $1,414 13% $159
New York $1,214 $1,360 12% $146

Will an accident raise your rates if you’re not at-fault?
A crash doesn't always equal more expensive coverage. Gusner says many insurers may be lenient if it's your first accident and not your fault.

"Whether your rates go up after a not-at-fault accident really varies by insurance company and by state," she explains. "One accident may not cause your rates to rise, but if you have been in multiple accidents, even if you were not-at-fault for each, your insurer may increase your premiums or not renew your policy."

How do insurers calculate an increase after an accident?
When an insurance company does raise rates following an accident claim, it employs a "surcharge schedule." This schedule determines how much the hike will be and can also come into play after you've been ticketed for moving violations.

Many insurers use standards set by the Insurance Services Office (ISO), which allows an increase of 20 to 40 percent of the insurer's base rate after an accident claim.

This base rate is the average rate charged in the state before discounts and other adjustments, plus the insurance company's claims-processing fee. The surcharge for multi-car policies is 20 percent of the base rate for the first two vehicles on a policy; it's 40 percent for a single-car policy, according to the ISO.

Here's an example of what you might expect under the ISO standard: Let's say your policy is for two cars with a $300 premium for each, and your insurer's base rate is $400. After an accident, you could be hit with an $80 surcharge -- which is 20 percent of the $400 base rate -- on both. That would bring your total surcharge to $160, about a 27 percent jump on your rate.

Ultimately, though, each company sets its own surcharge schedule, as long as it's approved by state regulators. The amounts and circumstances, Gusner points out, may change from state to state even within the same insurance company.

"Some states have very specific rules about what can be surcharged, such as North Carolina, which has its own surcharge schedule insurers must use, and New York, which has strict guidelines about what can hike up rates," she explains. "In other states, it's totally up to the insurer's internal rules; however, they must be approved by the state."

When not to file a claim
Gusner and most industry experts agree that filing a claim is probably a mistake if the vehicle repair costs are under or just above your deductible. Instead, it's smarter to pay out-of-pocket and avoid any surcharges generated by the claim.

"Keeping small claims to yourself, and away from your insurer and claims history, can help you keep future rates down," Gusner says.

But, she adds: "One caveat is that your policy may require you to report any accidents. This may be noted in your file somewhere - be sure to ask if it will be so it's clear you are not yet making a claim but are prepared to pay for repair costs at this juncture."

Accident forgiveness
"Accident forgiveness" is a frequently promoted policy option or loyalty reward that most of the major insurers -- including Allstate, GEICO, The Hartford, Liberty Mutual, Nationwide, Progressive and State Farm, among others -- offer as a way to avoid rate increases after mishaps. They're usually for the best customers, those without past accidents and moving violations.

In general, accident forgiveness works this way: If you have a clean driving record, the insurance company will ignore the first accident and not raise your premium. Some insurers may also cut the deductible by as much as $100 for each year you maintain a spotless record after the crash.

The details vary from company to company. Some may give you accident forgiveness immediately, while others will only do so after you've been an accident-free policyholder for as many as five years. Still others may forgive one mishap per policy in a three-year time frame, some will forgive one every six years, and some will waive one per driver listed on the policy every three years. You may also be required to have had no moving violations for three years.

Also, the feature usually comes with a price tag. At Allstate, for example, you get accident forgiveness by upgrading to either a Gold Protection or Platinum Protection package under its Your Choice Auto plan, which can add about 8 to 15 percent to the cost of a standard policy.

Progressive offers a forgiveness plan under its loyalty rewards program to customers who have been with the company for at least five years. However, remaining with one insurer for several years may not be the best way to go -- the Insurance Information Institute, a trade group, says consumers should be willing to switch if they find a competing company that offers the best options at the best price.

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