A car accident can be traumatic, and getting dinged with higher insurance rates afterward makes things worse. Your rates will eventually come back down if you avoid future accidents, but this usually takes a few years. Here’s what you should know about how long an accident affects your car insurance rates and what you can do to save money.
How long does an accident affect your car insurance rate?
An accident generally affects your car insurance rates for three to five years, depending on your insurance company and state’s regulations, as well as the nature and severity of the accident.
Most insurance companies increase your premium after an accident you cause. The practice is known as surcharging, and the way it is carried out varies by company and state.
Some states, including Arizona, New York and Ohio, only allow insurance companies to surcharge at-fault accidents. Other states give insurance companies discretion to surcharge an accident you did not cause.
The surcharge appears on your billing statement as an additional charge, often as a percentage of your premium, when you renew your policy after the chargeable accident. You may see a higher surcharge for a major accident than for a minor one.
An analysis by QuoteWizard shows that car insurance rates go up about 40% after an at-fault accident.
If your insurance company previously gave you a claims- or accident-free discount, the removal of this discount after an accident can compound the rate increase.
Insurance companies typically apply surcharges for three years, but you can ask your agent or the insurance company to find out for sure.
When you shop for insurance after a chargeable accident, the companies providing quotes will learn about the accident from the databases they use to check your claims history and motor vehicle records.
Insurance companies typically factor in claims and violations from within the past three years when they calculate your rate for a quote or application. However, some companies go back five years or more.
How can you lower your insurance rates after an accident?
Surcharges usually stay on your insurance bill for three years, but there are steps you can take to lower your car insurance rates after an accident. These may not completely offset the surcharge, but they may take a little pressure off your wallet.
Shop around
Surcharge practices vary by company. Some offer lower rates to drivers with accidents than others or surcharge certain types of accidents at lower rates. The best way to find out if you can get a better deal is to compare quotes from several companies.
Quotes are free and do not require a purchase. You’ll get the most accurate quotes when you are upfront about your claims history and driving records.
Adjust your coverage
You don’t want to cut back on essential coverage to lower your insurance rates after an accident, but you may be able to save a little money by increasing your collision and/or comprehensive deductibles.
You can also ask your agent or the company about potential discounts you may have overlooked in the past. Here are a few to inquire about:
- Usage based insurance (UBI): Many companies offer a discount just for signing up for their UBI program, which typically monitors and rates your driving practices through your smartphone. You can save more by maintaining a good driving score.
- Low-mileage discounts: If you no longer commute as far to work as you did when you initiated your policy, let your insurance company know. You may qualify for a low-mileage discount.
- Bundling: If you’re not already taking advantage of multipolicy discounts that most companies offer for bundling your car insurance with other policies, now may be a good time to consolidate your insurance with one company.
Consider accident forgiveness
Many companies offer an optional accident forgiveness benefit that protects you from surcharges after an accident. You can’t apply this benefit retroactively, but it may come in handy in the future.
The specific terms vary by company. You’re usually eligible for accident forgiveness after you go accident-free for a specified period, often three or five years.
Do all accidents show up on your driving record?
Due to state laws and insurance company requirements for reporting accidents, most end up on your driving record in one way or another, but they don’t always affect your insurance rates.
Most states require you to report an accident to law enforcement when it results in property damage over a specified dollar value or any injuries. Once there’s a report, it usually ends up in your motor vehicle records.
Insurance companies often require you to promptly report an accident for your policy to cover any expenses that may result from it. When you open a claim, it is also reported to the Comprehensive Loss Underwriting Exchange (CLUE), a widely used industry database.
When it comes to accidents, insurance companies generally focus on those that you caused and/or got you cited for a moving violation. If you do see a rate increase after an accident you did not cause, you may be able to get a better rate by shopping around for a company that only surcharges at-fault accidents.
If you’re deciding between filing a claim with your insurance company or paying for damages yourself, you’re usually still better off contacting your insurance company at the earliest opportunity. In this situation, you should let the insurance company know that you are only inquiring about the process and not formally opening a claim. This way, the incident will only be entered into your driving record if you subsequently do decide to pursue a claim.
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Lauren Smith
Digital Publishing Assistant · Answered on Nov 02, 2021
While it can be frustrating to have your car insurance rate increase after finally a claim, thankfully, it won’t last forever.
Generally, car insurance companies look at the last three to five years of your driving history when determining your rate, but it also depends on factors like where you live.
Because it’s a waiting game, you can try to lower your rates in the meantime by taking advantage of discounts your insurance company might offer like:
Another option is to shop around and try to find something cheaper by gathering quotes from at least three to five companies. You also can use the Jerry app. Jerry pulls quotes from the top 50 companies in under a minute and delivers the best deals right to your phone, giving you an easy way to comparison shop for free.
When you buy car insurance (or just get a quote), your insurer will ask a lot of questions about your driving history. One of the things they'll ask about is the accidents you've had, and the claims you've made.
They'll use these bits of information - along with loads of others - to figure out the price of your policy
Which leaves a lot of drivers wondering how long a car insurance claim stays on their "record". Or, in other words, how much time has to pass after they have an accident before they don't have to tell insurers about it.
The car insurance claims "record" - and how it affects your price
Technically, car insurance claims never disappear from your "record".
They're all added to the Claims and Underwriting Exchange (CUE), which is a big record of all the car insurance claims people make in the UK.
But that doesn't mean they affect the price of your car insurance forever. Instead, it all depends how far back your insurer wants to go.
Sometimes insurance companies only ask about claims you made in the last 3 years. Other times it might be as many as 7 years. Or even 10.
But generally, insurers will ask about the last 5 years.
If your insurer asks about the last 5 years, claims you made and accidents you had more than 5 years ago won't affect the price of your car insurance.
Sometimes, insurers will ask for a more detailed claims history from some drivers than others. So the amount of time a claim "stays on your car insurance" can depend on:
- The insurance company you're with
- How long you've been with them
- Your age
- Your postcode
- Whether you were at fault or not
Bear in mind that if you've had an accident and not made a claim, there's also a record of that. Those incidents can still affect your price a bit. But they shouldn't stop you getting a no-claims bonus. (Your insurance company should note down these accidents as "notification only").