How Accidents Change Your Car Insurance Rate

The chances are good that if you found this page, it means you have recently been in an accident. With any luck, it was only something minimal, like a fender bender. But serious accidents happen all the time, too.

And it’s hard to know exactly how your car insurance company is going to react when you have to file a claim and report it. Knowing what to do in a car accident is important, but so is knowing what to expect after.

Depending on the severity of the accident, the cost to repair or replace damaged property, and whether or not bodily injuries are involved we’ll all have a major influence on how your auto insurance provider will change your premiums when it comes time to renew your policy.

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Car Insurance Rates Before & After an Accident

Legend:
Clean Driving Record
After an Accident

California
New York
Florida
Texas
Illinois
Pennsylvania

40
80
120
160
200
240
280
320
360
400
440
480

$239
$499

$143
$191

$135
$184

$129
$155

$81
$120

$41
$53

How Your Insurance Provider Defines “Accident”

Not every accident that happens in the real world technically qualifies as on “accident” in the eyes of your insurance company.

There are certain criteria that must be met in order for your provider to classify the damages your claim is associated with as an official accident.

Unfortunately, it gets even more complicated than that the further down the rabbit hole you go. Different insurance companies have different criteria for determining what is and isn’t an accident; one provider may assume that your recent fender-bender is an accident, and charge you up to 33 percent more (or higher, and some areas) on your next policy renewal.

Read more: Is it a bad idea to change auto insurance after an accident?

Meanwhile, a company down the street may not think that such a mild collision qualifies as an accident, and you won’t see your rates skyrocket nearly as much.

On top of that, different insurance rules and regulations will vary from state to state. Under certain circumstances, a fender bender in Kentucky may get classified as an accident, while the exact same collision in Missouri or Florida may not be labeled the same way.

Car Insurance Rates Before & After an Accident

Legend:
Clean Driving Record
After an Accident

Wyoming
Vermont
Montana
Idaho
Nebraska
Kansas

20
40
60
80
100
120
140
160
180
200
220

$79
$98

$56
$64

$131
$232

$30
$43

$36
$51

$95
$113

 

Here are some of the most popular criteria for determining whether your incident will be considered a “qualifying accidents” by your insurance company:

• A minimum cost threshold – if the cost of your claim reaches a certain dollar amount, it may be considered a qualifying accident
• Type of coverage – the qualifying status of your accident may depend on which types of coverage you file your claim against. If you have to file it against multiple coverages, like collision and property damage liability, for example, your insurance company may consider it an accident; but if it only falls under collision coverage, you may get a free pass
• Fault – the amount of fault attributed to you will determine whether or not your accident qualifies as such. This is a big part of why the rules vary so much from one state to another – even within the same company. Since there are both fault and no-fault States, you may want to get in contact with your insurance agent to determine their fault threshold when it comes to determining qualifying accidents
• Your risk level – different drivers may or may not have their accident classified as a qualifying accident depending on which risk pool they belong to. If you are in a high-risk pool, even if you get into the exact same accident as someone with a good credit score and a clean driving record, yours could be labeled a qualifying accident while the other drivers accident won’t be. Finding out what risk pool you belong to is another issue you should bring up with your insurance agent so that you know what to expect if an accident occurs

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Determining Which Accidents Aren’t Really Accidents

So how do you save money on your auto insurance premiums by proving that your accident should not count as a “qualifying” accident? Well, you may be in for a bit of an uphill battle.

In some situations, it can be fairly cut-and-dry. And others, there is a lot of grey area which can (and usually will) fall in your insurance companies favor.

Below are some scenarios in which your accident will not be considered a qualifying accident in the eyes of your insurance provider:

• Acts of nature – if your accident happened as the result of a collision with animals, falling objects, or any other immediate external threat which is not a person or a vehicle
• If your vehicle was lawfully parked before it sustained damage from another driver
• If the other driver tries to reimburse you, pay you off, or if you have a legal judgment against them for the accident
• If your vehicle was struck as a result of a multi-car pile-up, and the driver(s) of the vehicle(s) which hit you were not determined to be at fault
• If property damage or bodily injury where the result of a hit-and-run, and you successfully report the accident within 24 hours to the proper authorities
• If the other driver who hit you is determined to be mostly or completely at fault
• Tire failure

Again these are just examples; and as we said earlier, the rules vary from state to state and company to company. Take tire failure, for example.

Some companies may give you a break if you get into an accident due to a blown-out tire, my other insurance companies may consider it a qualifying accident, especially if there are significant costs associated with fulfilling your claim.

If possible, you may want to sit down with your insurance agent and figure out what situations are exempt from being classified as a qualifying accident according to your provider.

So, How Much Will My Accident Cost Me?

Unfortunately, there are so many different factors at play when determining how much your premiums may increase — if they increase at all — after an accident that it is extremely difficult to make a concrete prediction.

But if you talk to your insurance provider and find out a) what does/does not fall into the category of a “qualifying accident”, and b) how much they typically charge drivers who have qualifying accidents on their record, you can at least plan ahead and budget for higher premiums after your accident has happened.

Car Insurance Rates Before & After an Accident

Legend:
Clean Driving Record
After an Accident(s)

Teenage Driver
Multiple Accidents
Older Violations > 4 Years

20
40
60
80
100
120
140
160
180
200
220
240
260

$116
$269

$76
$104

$59
$62

 

But whether or not it is a qualifying accident is not the only factor that your insurance company uses to determine how much more they will start to charge you for your monthly premium. Other factors include:

• Your age
• The number of violations on your record
• How recent your accident was

Unfortunately for young drivers, motorists who have multiple accidents on their record, and drivers whose accidents happened 3 years ago or sooner will see rates go up more substantially then older drivers with fewer violations whose accidents took place years ago.

The one good thing about accidents, as far as your insurance premiums are concerned, is the fact that after about three to five years, these violations no longer count against you in the eyes of your insurance company.

So with a little time, driving experience, patience, and caution, you can eventually lower your monthly premium after an accident. It won’t have a lifelong effect on how much you get charged for coverage.

Use our FREE quote tool to compare insurance rates now!