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Will Your Insurance Go Up if You Are in a Car Accident?

Will Your Insurance Go Up if You Are in a Car Accident?

Car insurance payments are by far the number one hidden cost you need to factor into your decision about purchasing a car, which for many, is not an option anyway when it comes to working commutes or other needs. So, is your car insurance going to go up, and if so, by how much, if you’ve gotten into an accident? The first answer is yes, the second answer really depends, so read on.

Who is Most Affected by Car Insurance Premiums?

Car insurance premiums are higher for those who are:

  • Male – yes, this is one of the last forms of institutionalized discrimination that is legally acceptable in America, but the simple reality is that men are just more accident-prone, and thus a bigger financial burden for insurance companies.
  • Teenagers – Statistically speaking, teenagers are by far the most dangerous drivers on the road. This is due to lack of experience, absolutely terrible decision-making skills, and a higher likelihood to engage in risky behaviors like playing chicken with 18-wheelers or doing donuts on icy parking lots.
  • Drivers under 25 – Just like with teenagers, this really just comes down to lack of experience and judgment. This is the same reason why under-25s usually can’t rent a car (without a credit card).
  • Driving expensive cars – You will absolutely pay higher insurance premiums on a brand-new Ferrari than a five-year-old Ford because insurance companies factor in such anticipated risks as the likelihood of theft as well as replacement cost.
  • Drivers with multiple traffic violations – If you’ve been hit with speeding tickets, had your license temporarily suspended, or were charged with other moving violations like reckless endangerment, expect your rates to go way up. For minor violations, depending on the state, these will probably only stay on your record, and therefore impact you financially, for a few years.

Another major factor to consider is location. Car insurance rates are far higher in some states than in others. You can check out the average premium rates by age group and state here.

Accidents, Driving Records, and What Your Insurance Company Can See

If you were not at fault in the accident, it is possible that it will not go on your driving record. This is not true in all states.

However, even if you were not at fault, accidents that result in injuries or damage over a certain amount (think of $1,000 as a general ballpark here), the accident is probably going to go on your record in almost any state. That said, if it’s not too serious and you weren’t at fault, this will likely only stay on your record for a short period of time, usually around three years.

Things get more complicated when the accident is your fault. If you were in an accident when you were drunk and you get a DUI at the scene, this is going to stay on your driving record for ten years, so don’t drink and drive!

How Does an Accident Impact My Car Insurance Rates?

The deciding factor when it comes to your car insurance premiums increasing or not is your driving record. Any accident that doesn’t make it onto your record and that your insurance company doesn’t find out about will not have any impact on your insurance rates.

On the other hand, accidents, moving violations, or more serious things like DUIs are going to get you hit with higher car insurance rates so long as those things stay on your record. That said, many states have laws mandating that insurance companies aren’t allowed to check back beyond a certain number of years for certain types of accidents or problems, including when the driver was at fault.

Another thing to keep in mind is that if you live in a no-fault state, which is where people collect damages from their own insurance company, even when they weren’t at fault, accidents will lead to higher premiums regardless of who is at fault because the insurance company knows what happened.

Click here to learn more about how to file a claim with a car insurance company.


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by Dirk DeBie // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.