Even though you do your best to find the best auto insurance policy for your needs, it’s not uncommon that having a car accident will lead to an increase in your monthly premium. Factors like the type of accident might directly affect your premium, and what happens in the years after your accident will also affect your bottom line. In this blog, we’ll look at what you can expect six months to a year after your accident, as well as up to three, five, and even ten years down the road.
Types of Accidents
There are two types of accidents:
- At-fault accidents
- Not at-fault accidents
Accidents you cause (at-fault accidents) will almost always raise your insurance premium. Typically, insurers will charge more for accidents that were your fault since they change your driver’s profile and your road responsibility measure.
Accidents you didn’t cause (not-at-fault accidents) may still increase your monthly insurance premium under certain circumstances. The good news is that these increases won’t cost you as much as at-fault accidents. And, like with speeding tickets and most other violations, not-at-fault accidents won’t stay on your record after a certain number of years.
Your Premiums After an Accident
Up to six months after
Your car insurance rates typically go up immediately after an at-fault accident. This is because your insurer will now assess you as a higher-risk driver, suggesting that you’re more likely to file claims in the future.
The amount your premium will increase after an accident depends on several factors. These could include: who your insurance provider is, what your driving record is, what your claims history looks like, your geographic location, and in some states, even your age, and gender.
Insurance companies view younger drivers (under 25 years old) as a hazardous group to insure and more likely to file a claim in the near future. Young drivers may see the highest increases after an accident. Premiums for full coverage insurance go up by an average of an estimated $750 immediately after an accident.
If your previous insurance premium was $1,771, your new premium would be around $2,521. However, this will also vary depending on the state that you live in. In some states, the average premium increase is higher than the national average.
The more damage that’s caused in your accident, the more you’ll likely see your premium increase. People carrying a claims-free or good driver discount might also lose that advantage after the accident. This is another reason why insurance premiums can spike so high after an accident.
Suppose you have a history of at-fault accidents on your driving record. In that case, you’re likely to see an even steeper increase since your insurance provider might now classify you as a high-risk driver.
One year after your accident
Your premiums will likely remain the same one year after your car accident. This is because your risk level increases after an accident, so your insurance provider will want to ensure that you won’t have another claim before they can consider accident forgiveness.
What should you do one year after your car accident?
Drive safely. It’s that simple. While there is always a chance that you can experience an accident that isn’t your fault after your initial claim, driving cautiously is the best preventative measure.
Maintaining a safe driving record and not being charged with traffic violations are essential if you do not want your insurance premiums to increase. Another reason to avoid these infringements is that they’ll stay on your record for a significant amount of time. After an accident a year ago, the last thing you’d want is more infringements on your record, further decreasing your chances of forgiveness.
Three years after your accident
Depending on your insurance provider, you may be eligible to apply for accident forgiveness at the three-year mark. Most insurance providers offer accident forgiveness three or five years after your accident if you haven’t made another claim in that time.
What is accident forgiveness?
Accident forgiveness is something insurance providers offer to their customers to prevent their premiums from increasing after a car accident happens and a claim is filed. Each insurance provider has specific policies and requirements in place before a customer can qualify for accident forgiveness.
Insurance providers may also use accident forgiveness as a reward for good driving by offering you a discount on your policy, or they could even waive the rate increase for your first accident. Some insurance providers even automatically include accident forgiveness in certain states.
The beauty of accident forgiveness is that your insurance premiums won’t increase after you file a car accident claim. Some insurance providers even include accident forgiveness at no charge, while others might offer it as a purchased endorsement — meaning you’d have to pay higher premiums in exchange for accident forgiveness.
Without accident forgiveness, your premiums increases might vary further after your first accident, in some cases as much as 28%.
Five years after your accident
By this time, almost all insurance providers can offer you accident forgiveness – that is, if you haven’t had any infringements, traffic violations, or other accidents during this time.
Again, the secret is to drive as safely as possible until you’re eligible for accident forgiveness. Otherwise, your record will reflect your violations, making it very difficult to qualify.
Your initial car accident will also be removed from your driving record at the five-year mark.
Here are some other things you can do after your car accident to further reduce your insurance premiums:
- Improve your credit
- Increase your deductibles
- Look for discounts
- Shop around with other insurers
- Update your coverage choices
- Consider a different car
Ten years after your accident
Ten years after your accident, it’s considered a thing of the past. Things like buying a new car, changing insurance providers, and maintaining a safe driving record affect what kind of premiums you will be paying.
Inflation and rising premium costs will also affect how much you will pay on your car insurance per month since premiums typically go up yearly.
After ten years with an insurance provider, you may qualify for discounts, benefits, additional perks, and rewards or loyalty programs.
What’s the Bottom Line?
The bottom line is that you should anticipate an increase in your premiums after an accident, especially if it were an at-fault accident. With that being said, you can do many things to reduce your premiums. Maintaining a safe driving record will help keep them low if you want to change companies.
Always focus on maintaining a clean driving record, and possibly look to apply for accident forgiveness early on with your insurer to avoid the higher costs that come after having been in an accident.
To learn more about auto insurance, what it costs, and which policy is best for you, reach out to Hometown Financial Group today!