How long does it take for car insurance to get cheaper after an accident?
One of the unfortunate consequences of a car crash is that you can expect your insurance premium to rise for as long as five years after an accident. While most insurance companies are certain to charge extra after an at-fault accident where damages to your vehicle exceed $2,000, your insurer can also raise your rates even if you don’t file a claim. Let’s examine why this is, by how much insurance rates typically increase after an accident, and how long rates take to decrease after a collision.
Car insurance rates after an accident — table of contents:
- By how much does car insurance go up after an accident?
- Why do car insurance companies raise rates after an accident?
- When do rates decrease after an accident?
- FAQs
- Additional resources
By how much do car insurance rates go up after an accident?
After an accident, policyholders can expect insurance rates to rise by an extra $767 per year — that's a premium increase of almost 50% from the average rate without an accident ($1,548). Over three years, that's a whopping $2,300 of extra premiums you'll need to pay. Below, we illustrate how much in total premium an at-fault accident could cost.
To further demonstrate the financial ramifications of a collision, we gathered car insurance rates from some of the most popular auto insurance companies in the US (methodology). See below how much a collision could cost, depending on which insurer you're with.
AVERAGE ANNUAL INSURANCE RATES AFTER AN ACCIDENT (AT-FAULT): THREE-YEAR DURATION
| Insurance provider | No accident | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|
| Allstate | $1,888 | $3,017 | $4,147 | $5,276 |
| Farmers | $1,525 | $2,226 | $2,928 | $3,629 |
| GEICO | $1,276 | $1,997 | $2,719 | $3,441 |
| Liberty Mutual | $1,647 | $2,358 | $3,068 | $3,779 |
| Nationwide | $1,347 | $2,174 | $3,000 | $3,827 |
| Progressive | $1,604 | $2,772 | $3,941 | $5,110 |
| State Farm | $1,313 | $1,617 | $1,922 | $2,226 |
| USAA | $948 | $1,288 | $1,629 | $1,969 |
Allstate is typically the most expensive car insurance company after an at-fault accident. USAA is the cheapest.
AVERAGE INSURANCE RATE INCREASE AFTER A COLLISION (AT-FAULT)
| Insurance provider | Average increase after an accident |
|---|---|
| Allstate | $1,129 |
| Farmers | $701 |
| GEICO | $721 |
| Liberty Mutual | $710 |
| Nationwide | $826 |
| Progressive | $1,168 |
| State Farm | $304 |
| USAA | $340 |
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Why do car insurance rates go up after an accident?
Auto insurance rates commonly increase after an accident for one of a few reasons:
1. The fees associated with filing an auto insurance claim
Surcharges triggered by an at-fault accident include the cost of the claim adjuster's time, fees related to the claims representatives, and the cost of parts and labor. These fees usually aren’t accounted for in your monthly premium, and thus increase if you utilize them. It helps to know when to forgo making a claim and settling out-of-pocket, especially if it's a minor accident.
2. Additional risk
Historical data show drivers who have been in a crash are more likely to get into another accident. These drivers present more risk — and potentially more expense — to insurance companies than do clients with clean records. An insurance company accounts for this added risk by increasing the cost of auto insurance coverage for drivers involved in collisions.
When do insurance rates decrease after an auto accident?
While the timing may vary based on location and the circumstances surrounding the incident, most insurance companies will drop rates three to five years after the incident. If the collision occurs long before your policy renewal date, this penalty period can stretch beyond the typical three-to-five-year window.
If the penalty period for an accident is set to expire in January but your policy ends in June, the accident will not be removed from your insurance bill until your policy renews — or you specifically ask. If you have an accident on your insurance record, keep track of the date and chargeable time. Your insurance company will not do this for you. This can help you avoid a longer-than-necessary surcharge period.
Three years is a common penalty period following a claim for property damage or collision. Policyholders may be penalized longer for the below violations:
- DUI/DWI
- Bodily injury claim
- Reckless driving
- Multiple — or excessive — violations within a certain time
- An accident resulting in serious bodily harm or death
After the accident falls off your driving record, consider adding accident forgiveness to your auto insurance policy to avoid a surcharge should you're involved in another accident. Most insurance companies require a driver to be claim- or accident-free for a period of time (typically three to five years) in order to receive accident forgiveness.
How to find cheap car insurance after an accident
The amount by which car insurance premiums go up after an accident depends on many variables. The specifics of the accident, your vehicle, you, and most importantly, your insurance company.
If you’re being charged a significant amount in additional premiums after an accident, it helps to shop around for a better rate. Every insurance company uses its own rating methods to calculate premiums, so you might be able to find cheap car insurance after an accident if you compare rates thoroughly.
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Frequently asked questions
By how much does car insurance go up after an accident?
An at-fault collision causing more than $2,000 in damage to your vehicle can raise your insurance rates by $767 per year, on average. Because most accidents stay on your record for at least three years, you can expect to pay at least an extra $2,300 in premiums during that time. Of the major car insurance companies, USAA and State Farm passed their clients the lowest average premium hikes after an accident: just $340 and $304 per year, respectively.
When does car insurance go down after an accident?
At-fault accidents usually stay on your driving record for between three and five years. As such, you can expect your insurance rates to be affected for at least three years. One way to save on auto insurance is to compare rates and look for a new policy.
Is it possible to get cheap car insurance after an accident?
Yes, you can most certainly get car insurance after an accident. However, it might not be affordable. If the accident was your fault, you can expect that your new car insurance company will charge you more for your policy. However, if you didn’t have car insurance at the time of your accident, your new policy will only apply going forward and will not extend retroactively to your prior accident.
How can I find cheap car insurance after an accident?
Comparing quotes from multiple car insurance companies is the best way to combat soaring car insurance premiums. Many insurers provide policy discounts for things such as bundling your home and auto policies. You could also consider raising your deductible, as that can lead to lower monthly payments.
