When Does Car Insurance Go Down After an Accident?

Even if you didn't file a claim, your insurance premium can increase after an accident. When will your rate go back down?

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How long does it take for car insurance to get cheaper after an accident?

One of the unfortunate consequences of a car crash is the impact on your car insurance premium. After an auto collision that results in an insurance claim, you can expect your rates to rise. Even if you don’t file a claim, your insurance company can raise your rates for as long as five years after an accident. Let’s examine why this is, by how much rates typically increase after an accident, and how long rates take to decrease after a collision.

 

Car insurance rates after an accident
  1. By how much does car insurance go up after an accident?
  2. Why do car insurance companies raise rates after an accident?
  3. When do rates decrease after an accident?
  4. Additional resources

 


 

By how much do car insurance rates go up after an accident?

Most insurance companies charge extra for three to five years after an at-fault accident in which damages to your vehicle exceed $2,000. You can expect your rate 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 excess premium you'll need to pay. Below, we illustrate how much in total premium an at-fault accident will cost you.

Total Insurance Cost of At-Fault Accident.png

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 to see how much, on average, a collision will cost you depending on which insurer you're with.

AVERAGE ANNUAL INSURANCE RATES AFTER AN AT-FAULT ACCIDENT: OVER THREE YEARS
Insurance providerNo accidentYear 1Year 2Year 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 AN AT-FAULT COLLISION
Insurance providerAverage 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 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 a 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 premiums for drivers involved in collisions.

 


 

When do insurance rates decrease after a car crash?

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 property damage or collision claim. You 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 your accident falls off your driving record, you can also consider adding accident forgiveness to your auto insurance policy to avoid the surcharge should you get in another accident. Most insurance companies require that you be claims- or accident-free for a period of time (typically three to five years) in order to get an accident forgiven.

 


 

How to find cheap car insurance after an accident

The amount by which car insurance premiums rise 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 for an accident, it helps to shop around for a better, cheaper rate. Even with the accident on your record, every insurance company has their own rating methods in calculating your premium. Enter your ZIP code below to see car insurance quotes from other companies across the US.

 

Find an affordable car insurance policy!

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