How Long Does an Accident Affect Your Car Insurance Rate?

Jessica Nguyen
December 28, 2020

Getting into a car accident at any age, under any circumstance, is a very stressful situation and the consequences of it will last longer than you would like. It’s hopeful thinking that once your car is fixed and the insurance claim is settled that you can forget that the accident ever happened but, like your credit history, automobile accidents will temporarily adversely affect your car insurance rate. The exact number of years the accident remains on your record depends on various factors, such as the state you live in, what percentage of fault you were assigned, the seriousness of the infraction, your age, etc. This higher premium is what’s called a “surcharge.” The way insurance companies determine the surcharge amount varies among providers and according to the state where the accident happened, but there are some questions they will all consider, such as whether the accident was minor or major and if it was your first accident or one of multiple accidents.

How Long Does an Accident Affect Your Car Insurance Rate?

An accident will not affect your insurance rate forever. Most insurance companies will generally only look back at the last 3-5 years of your driving history when calculating your premium. The length of time an accident appears on your driving record depends on factors such as, how severe the accident was and which state you live in. For example, in California, most minor accidents stay on your driving record for three years whereas more serious violations, like a DUI, will stay on your record for 10 years.

Even if you weren’t at fault, you will have to report the accident to your provider and it will appear on your record if damages were more than $1,000, if anyone was injured, or if anyone died as a result of it. Even though certain car accidents will only raise your rates for a certain number of years, you will be in a probationary period that can last as long as six years. So if you cause another accident or get a ticket within that same timeframe, your rate will increase even more and take longer to disappear, but if you manage to drive accident-free, your rates will eventually drop.

What Happens if I Switch Insurers After an Accident?

You may try to look for a loophole to a higher rate by switching to another provider, but they will also know about the accident. The number of years your rate will be higher will be exactly the same with another company. This is because every property claim you file gets logged in your personal insurance report card, known as a CLUE report. This report goes back seven years and every insurance company can assess it. However, that doesn’t mean that every insurer will offer you the same rate; they will just raise it for the same length of time.

Your insurance company only knows about the accidents you report so if you’re involved in a minor incident such as a fender bender, and you’re able to resolve it on your own without needing financial assistance from your insurance provider, you’ll be able to avoid seeing a premium increase. But it’s always best to report everything so that there is a paper trail for the other party in case anything happens, and luckily the surcharge in events like these will not be too damaging to notice.

Your Rates Will Probably Go Up After an Accident If:

  • You’re found to be at fault.
  • The cost of damages is significant.
  • You have multiple violations within a short period of time.
  • You’re involved in an accident resulting in serious bodily harm or death.

Your Rates Might Not Go Up After an Accident If:

  • The other driver is found to be 100% at fault for the collision.
  • It’s your first incident, and your provider has accident forgiveness (can only be used once).

Causing a car accident will lead to higher insurance premiums but it truly depends on the details of the accident and your driving history. The cost of the accident which your provider will have to pay for is also a huge factor in determining your surcharge. If the amount of damage is below $1,000, the surcharge will be significantly less than if damages of the accident exceed $10,000. If you are at fault and someone is injured, you will lose your good driver discount and see a 20%-25% premium increase that will be applied for at least 3 years. Not only that but your car insurance rates may increase as much as 32%, even if you weren’t completely at fault.

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Point System for Accident Surcharges

Every state’s DMV has its own policies regarding how long different types of accidents and violations will remain on your record. Many states use a “points” system to track and sum up your violations. With this, different states will have different rules about what types of accidents your insurance company can use, or how far back they can look into your history. Therefore, any points accumulated against you will inadvertently also impact your report in your insurance company’s point system. Most insurance companies also use a point-based system to calculate surcharges and also have specific points depending on the type of incident. It’s important to remember that the more points you accumulate, and the larger the claim, the higher the surcharge on your car insurance rate.

How Do I Get the Cheapest Rate?

Compare insurance quotes to see who will offer you the best rate. Each insurance company weighs each factor differently so it’s important to shop around before you decide on a company. Start by entering your zip code below. You’ll then answer a few questions before getting your free quotes.

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