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We all know that traffic accidents can happen at any given time. Unfortunately, the financial consequences of these accidents can extend far beyond the initial car repair costs. Even minor accidents can cause a significant increase in your insurance rates. However, this does not have to be the case. By making smart choices, you can still save on your car insurance rates, even after an accident.
Since you are reading this, we can assume you were recently in a crash or know someone involved in a motor vehicle accident. If that is the case, we are genuinely sorry to hear that, and we hope that no one was seriously injured. If you are reading this to learn more about potential rate changes after a traffic accident, we’re here to help you prepare and plan.
How To Keep Your Car Insurance Rate Low After An Accident
Even if no one was injured in a traffic incident—whether a head-on collision, a rear-end crash, or a sideswipe accident—you may experience a jump in price for your car insurance renewal. Insurers consider drivers who get involved in accidents to be a higher risk, so they raise the premiums to offset their potential losses.
However, there is a good chance you won’t see any increase in your insurance premium. In particular, if 1) you are not at fault for an accident, 2) it is the first accident you were involved in, or 3) your history is clear of any insurance claims or driving violations, the insurance company might not raise your rates.
On the other hand, if you are the one to blame or have been involved in far too many accidents, regardless of whether or not you were at fault, you are likely to experience an increase in your auto insurance. The amount will vary based on the provider and the severity of the car accident.
For example, there may be an increase of 20–25% on your premium if someone is injured and you are the one at fault. This increase happens because you’ll likely lose the Good Driver Discount on your insurance policy. The worst part of this is that the increases in premiums can last for up to three years.
Now, that does not mean you need to panic. Below, we will go over how to avoid an insurance increase after an accident.
Tell Your Insurer About The Accident, No Matter The Scale Of It
Let’s say you were involved in a minor fender-bender in a left-turn accident. Even if you weren’t at fault and no one was injured, it might be tempting to skip reporting the accident to your insurance company. After all, you might think, “What they don’t know won’t hurt me.” However, that’s not the case.
Suppose the other person involved suddenly decides to sue you, even though you both agreed at the scene that you wouldn’t. If you do not report the accident immediately, regardless if it’s a minor collision or a fatal accident with a truck, a car insurance company could refuse to honor your policy. Essentially, it does not matter who is responsible for the accident or how big it was; those involved must report the incident promptly.
Look For An “Accident Forgiveness” Clause In Your Policy
According to industry estimates from car insurance companies, the majority of drivers will find themselves in an automobile accident every 17.9 years. Some insurers understand and accept that accidents happen and are a part of life. So, they will waive the first accident, and you will not face any increase in your premium. This is also known as accident forgiveness.
The specifics of this clause differ by insurance provider, so it is essential that you thoroughly read this provision in your policy. Some companies automatically offer accident forgiveness, while others provide it only after you have been accident-free for some time, usually between three and five years. They can also require policyholders to not have any moving violations for up to three years.
Remember, though, that having this clause in your policy doesn’t mean the accident won’t go on your driving record. Your insurance provider may not raise your premium after the first car collision. However, if you eventually decide to switch insurers, they will see the incident on your record and may adjust your rate as they see fit.
Also, accident forgiveness only applies once per policy, not per driver on the policy. If another individual in your group’s insurance has already used this clause, it will no longer apply to you, even if it’s your first time getting involved in an automobile accident.
Accident forgiveness isn’t always available. Some insurers choose not to offer it, and some states do not allow it. In California, for example, Proposition 103 prevents insurance companies from charging too much for their policies. Since accident forgiveness often means charging higher rates to offset the possible costs, the law implicitly prohibits it.
Opt For Higher Deductibles
The deductibles are the amount you pay after your claim has been filed and your insurance kicks in. If you request a higher deductible, you can reduce other costs substantially. Let’s say, for example, you raise your deductible from $250 to $550. This could lower your comprehensive coverage and collision costs by anywhere between 15% and 30%.
If your deductible were raised to $1,000, it would save you at least 40%, or possibly even more! However, before deciding on a higher deductible, be sure that you have enough set aside to pay this amount if you need to file a claim.
The real key to saving is not the discounts themselves but the final price. Some companies may only offer some of these discounts, but even without all the deductions, their rate may be lower overall than a company that does provide all of them.
Consider Reducing Your Coverage
If an auto accident prompts your insurer to increase your premium and you cannot afford it anymore, consider reducing your coverage. Just make sure you still have the minimum coverage required by the state.
To lower your rates, you could remove comprehensive and collision coverage from your policy. Keep in mind that this may not always be the wisest move, especially if you have a new car that you’re still paying off. Besides possibly being required by your auto loan provider, comprehensive and collision coverage also provides protection when you cannot afford to replace or repair your vehicle after a traffic-related accident.
Comprehensive coverage applies to damages resulting from vandalism, theft, hail, fire, and animal-related accidents. Collision coverage, on the other hand, applies to the damages you incur after colliding with another vehicle or crashing into a fixed object.
You might need these additional coverages if there is a high risk of unexpected non-collision events where you live. Finally, you should retain these coverages in your policy if there are many uninsured or underinsured motorists in your area.
Conversely, you can do away with comprehensive and collision coverage if you have a fully paid older vehicle you can afford to replace after an unforeseen car accident. Also, if the additional coverages exceed 10% of your car’s current value, they might not be worth paying. You can check your car’s current value through the Kelley Blue Book.
Take Advantage Of Insurance Discounts
Another tip for lowering car insurance is to apply for discounts. Insurers provide several discounts to policyholders who qualify. These may be based on your policy, vehicle, affiliations, and driving behavior.
Here are some of the discounts offered by auto insurance companies:
- Anti-Theft Discount—Aside from adding an extra layer of security, installing anti-theft devices or features can also help you save up to 25% on insurance.
- Auto Pay Discount—Insurers can offer you a discount if you choose to have your monthly insurance payment automatically deducted from your bank account.
- Multi-Car Discount—You can save as much as 25% by insuring multiple cars with the same provider.
- Military Discount—Veterans or members of the armed forces may apply for a 15% military discount.
- Paperless Discount—Choosing to have your policy-related documents and bills sent through email is not only convenient but also practical, as it may qualify you for an average discount of around 5%.
- Student Discount—Some insurance companies reward young drivers who maintain good grades in school with a student discount, which can range from 5% to 25%.
Keep in mind that the actual rates and offers differ across providers. Additionally, these discounts do not automatically apply to your policy. If you want to enjoy these perks, ask your insurance provider to confirm if you qualify for them.
Consider Paying Your Insurance Premium In Full
Most people typically pay their car insurance premiums every month by check or with a debit or credit card. Others choose to pay through electronic funds transfer (EFT).
However, there’s a way for you to save more on your insurance, and that’s by paying your premiums in full. Some insurers offer an additional discount when you choose this option, as it’s better and easier for them to keep track of your payments.
Making a full payment also means you won’t have to worry about remembering to pay your dues on time every month. The upfront cost may be higher, but it could save you money in the long run.
Bundle Two Or More Insurance Policies
You can save more on your insurance if you buy more than one policy from the same company. Bundling is commonly done with home and car insurance, but the discount applies to any two policies or more as long as they are with the same insurer.
A bundling or multi-policy discount can range from 5% to 25%. If you already have a home insurance policy, consider buying an auto policy from the same provider (and vice versa).
However, don’t feel obliged to choose a bundled option solely for the discount. Make sure you’re still getting enough coverage at a reasonable rate. Otherwise, shop around for different car insurance policies and find the one that works best for you.
Inquire About Group Insurance Plans
Another way to lower your insurance rate is to subscribe to a group plan. If you are a member of certain groups or associations, you may be able to get an affiliation discount of up to 25% on your premiums. Keep in mind that the actual rate may differ per insurer.
Some insurance companies offer discounts to members of partner organizations or alums of certain universities. Additionally, your employer might be affiliated with an insurance provider, potentially qualifying you for further discounts.
The best way to know whether you qualify for an affiliation discount is to inquire about it with your insurer.
Attend A Driving Class
You may have thought, or at least hoped, that the last time you would experience driver’s education was at the age of 16. However, if you take the time to study safe driving tips and take a course to refresh your memory, your insurance company might see this as an attempt to improve your current driving skills, especially if you’re an older driver. In turn, your provider might consider not raising your rates during renewal time or even offering a discount.
Attending traffic school is not something you need to wait for your insurance company to ask you to do. You can do it on your own and then tell them about it. Do an online search to find these classes, as locations and methods can vary by state.
However, note that this method would not be helpful if you were driving under the influence or driving recklessly when a preventable car accident occurred.
Practice Safe Driving
One of the most effective ways to reduce your car insurance rates is to avoid car accidents and traffic violations. Driving safely and following traffic regulations are also good practices, as they reduce your risk of getting into more car accidents, especially ones that result in serious injuries like brain injuries, spinal cord injuries, burns, paralysis, or amputations. Eventually, if you have no more infractions on your record, your rates will go back down.
Furthermore, maintaining good driving habits can qualify you for additional discounts. Insurance companies in California offer a Good Driver Discount of up to 30% to those who maintain a clean record for a certain amount of time.
Join The Usage-Based Insurance (UBI) Program
If you drive less than 10,000 miles annually, have safe driving habits, and do not often drive at night, you should sign up for a usage-based car insurance program. Insurers usually offer a telematics discount for drivers who join this program. In exchange, you agree to real-time monitoring of your driving habits through a smartphone app or a device installed in your car.
UBI programs can offer a 5–10% discount upon enrollment or registration. If the telemetric device reflects that you are a good driver, you can get up to a 40% discount on your policy.
It doesn’t come without risks, though. The device will track everything, meaning your insurer will know if you go over the speed limit or often slam on the brakes too hard. That said, some drivers have reported that their rates increased after the device showed that their driving habits weren’t safe.
So, if you’re considering joining the UBI program, make sure you practice safe driving habits and obey traffic regulations.
Switch To A Safer Car That Is Less Expensive To Insure
If you’re financially able, consider buying a new vehicle that is less expensive to insure. Some insurance companies offer discounts for drivers with car models that are three years old or newer. With a new car discount, you might be able to save up to 15% on your policy.
Switching to a hybrid or electric vehicle can also help you save more. Some insurance providers offer incentives to drivers who choose alternative energy and other eco-friendly options.
Newer cars are equipped with more safety features, which reduce the likelihood of car accidents. The lower risk leads to higher profits for insurers and savings for drivers. As a result, newer and safer models are usually less expensive to insure.
If you cannot afford a good and safe car, consider installing additional safety features in your current vehicle. Some upgrades, such as dual airbags, daytime running headlights, and anti-lock brakes, may qualify you for a bigger discount of up to 40% from your insurer.
Ask About Your Insurer’s Loyalty Perks
A loyalty discount can also reduce your car insurance rates by around 10%. Ask your provider if they offer any loyalty perks, especially if your policy is about to expire. This will help you decide whether to renew your plan with the same company or switch to another provider that offers more benefits.
Some insurers may offer larger discounts the longer you stay with them. Take the time to ask to ensure you don’t miss any opportunities to lower your insurance rates.
Update Your Personal Information With Your Provider
Have you recently gotten married or moved to an area with fewer people and better weather? If so, update your provider with this information.
Insurers generally consider you a lower-risk driver after getting married, as they assume you are more careful on the road and more financially stable. Moving to a “safer” neighborhood might also get your insurer to reconsider your rates and reduce them accordingly.
You should also inform your insurance provider when moving violations have expired in the last three years. This can significantly lower your insurance rate and help you save more.
Your insurer will not automatically reduce your rates. Some insurance companies may also consider your credit score to help them determine your rates. Research suggests that there is a correlation between a driver’s credit standing and their likelihood of filing a claim. Specifically, those with high credit scores are said to be less likely to file a car insurance claim.
Insurers charge higher rates for drivers with a poor credit history to offset their anticipated losses. In contrast, they typically offer lower rates to drivers with good credit scores, whom they consider less risky.
Remember that insurance companies are still businesses. They will always prioritize the options that give them the most profit.
Look into improving your credit standing to qualify for lower car insurance rates. Pay your bills on time and clear any existing debt if possible. You should also monitor your credit score to track improvements and check for inaccuracies in your credit statements.
It’s always a good idea to keep your credit score high. However, in some states, like California, insurance companies don’t look at your credit history when setting rates for auto policies. Your credit rating won’t decrease or increase your premiums.
Shop For Another Policy
If you are still not satisfied with your renewal rate, take the time to look around for another policy. Every company is different when it comes to pricing, so it is crucial that you shop around for prices. Try to get at least three quotes by calling companies directly or visiting their websites. Comparisons can also sometimes be found at your state insurance department.
Inquire about the discounts they offer and see if you qualify for any of them. Also, let the insurers know if you park your car in your garage rather than on the street. The former makes your car less prone to being stolen or damaged, and as a result, some insurers may be willing to reduce your rates.
Insurance is for peace of mind and financial protection, which is why it is essential that the company you choose for your insurance is financially stable as well. AM Best has an option for you to check out various insurance companies’ financial health and will provide ratings. Another site you can view for this information is Standard & Poor.
Be sure not to only shop based on the price. Ask people you trust for recommendations on insurance. You may also contact your state insurance department and ask if they provide information on consumer complaints about the company.
Apart from choosing a financially stable insurance company, you would also want one with good customer service. Find an agent who is willing to take the time to answer all the questions that you have.
Do not lie when you are looking for a new insurer, as the potential insurer will have all reported accidents and tickets on its database.
Some Factors Affecting Car Insurance Rates
Car insurance rates vary due to several factors. Here are some of the most significant factors that could affect your premiums:
- Age—Young drivers are often charged higher rates because they are more likely to act recklessly and get into accidents that could be expensive to insure.
- Location—Drivers in certain locations face higher insurance rates. Some areas are riskier to drive in than others, especially where heavy rain, hurricanes, and other natural disasters often occur.
- Vehicle—Some car brands and models (such as Teslas) are more expensive to repair or replace in the event of an accident. The drivers of these vehicles are typically given higher rates.
- Driving History—A driver with a long list of traffic violations and infractions is considered high-risk and, therefore, charged higher.
- Annual Mileage—Those who drive more than 15,000 miles per year have the highest car insurance rates. This is because the more time they spend on the road, the higher their risk of unfortunate car accidents.
- Claims History—Drivers with an extensive claims history are often perceived as likely to cause losses to the insurance company and consequently charged higher rates.
The auto insurance company you choose can significantly affect your rates. Some offer many discounts but still charge a generally high rate, while others have fewer discounts but lower overall rates. The key is to shop around for quotes and see which policy would be most practical for your needs.
Frequently Asked Questions
Will Filing A Claim With My Insurance Raise My Premium?
A claim filed with your insurance company might raise your rates, especially when the accident is your fault. Moreover, an insurer might raise your premiums if you have more than one not-at-fault accident within a policy period.
Filing an insurance claim is also a complicated process. It can be time-consuming, and some might think that they could have spent the time dealing with the immediate aftermath of the accident.
However, withholding information lowers your odds of winning your case. What this means is that you might then be forced to pay all the bills and damages on your own. That cost is likely much higher than the increase in your premium.
What Are The Benefits Of Accident Forgiveness?
Having an accident forgiveness clause in your policy means you don’t have to stress over rate increases after your first car accident, whether or not you were at fault. It also means you can keep the discounts you currently have in your policy.
However, the clause should already be in your policy to claim its benefits. You cannot just get this add-on after a car accident and expect it to apply to your case.
Why Do Insurance Rates Go Up After An Accident?
Your insurance rate is calculated based on your risk factor. If you get into a passenger car accident, insurers believe you are more likely to be involved in other traffic violations. This makes you a high-risk driver who has a high chance of submitting a claim down the road. Again, insurance companies are all about minimizing their payouts. They tend to increase premiums for drivers who have gotten into an accident to offset potential future losses.
How Much Does Insurance Go Up After An Accident?
On average, your insurance rates may increase by 40 to 45% after an at-fault accident. However, the rate could be lower if the car crash incident was not your fault or your policy had an accident forgiveness clause.
How Long Does It Take To Lower Car Insurance After An Accident?
If you have no additional violations, your car insurance rates will return to normal after your infraction or accident is removed from your record, typically after three years.
How Can I Lower My Car Insurance Fast?
The quickest ways to reduce car insurance rates include taking advantage of discounts and raising your deductibles. You may also consider signing up for usage-based insurance programs or switching to a provider offering lower rates and better perks.
Can I Switch To A Different Insurer After My Current Provider Raises My Rates Following An Accident?
Yes. You can change your insurance provider after an auto accident. Whether you found a better deal somewhere else or cannot afford your policy anymore after the rate increase, you have the freedom to switch insurers.
How Long Does A Car Insurance Claim Stay On Your Record?
It depends on which state you’re in. For example, in California, car insurance claims will usually stay on your record for three to five years. The actual duration will depend on the severity of the accident and whether it was your fault.
What Are Chargeable And Non-Chargeable Accidents?
An accident is considered chargeable if you are more than 50% at fault and if it results in injuries or property damage. On the other hand, a car crash or accident is non-chargeable if it happens because of someone else’s negligence and you are found to be less than 50% responsible.
A chargeable accident typically increases insurance premiums, while a non-chargeable accident does not affect your current rates.
Does Car Insurance Cover Mechanical Failure?
In general, auto defect problems, such as brake failures, defective tires, and defective airbags, are not covered by auto insurance unless related to a covered hazard. On the other hand, a car crash, a run-in with an animal, or anything falling onto your car, such as a tree branch, may be covered. If you have further questions about what your current policy covers, contact our auto accident attorneys for clarification.
Can I Still Qualify For Discounts Even With An Accident On My Record?
Yes. A car-related accident may smear your otherwise clean record, but that doesn’t mean you can’t apply for discounts on your insurance premiums. Some benefits, such as the Good Driver Discount, may no longer be applicable. However, you may still take advantage of other offers as long as you qualify.
How Do I Avoid An Insurance Increase After An Accident?
Ensure you report any traffic or car accident to your insurer as soon as possible, preferably after speaking with our car accident lawyers. We can help you obtain evidence, such as the official police report and witness statements, especially if the accident wasn’t your fault. We will also communicate with insurance adjusters on your behalf and ensure your rights are protected.
Need Help With Your Insurance Claim? Call Our Car Accident Lawyers Today
Now that you’ve learned how to reduce car insurance rates after an auto accident, you can apply these tips to see which works best for your situation. Contact Arash Law if you need reputable car accident lawyers to assist you further in negotiations with your provider. With decades of experience protecting the rights of victims, our California personal injury law firm can help you maximize your claim and pursue the compensation you deserve.
Every case is important to us, and we value all our clients. Our knowledgeable and skilled personal injury lawyers can help you through the complicated and frustrating process following an unfortunate car accident. We will advise you on the best steps to take, especially when filing a claim with your insurance company and the at-fault party’s provider.
We’ve successfully handled numerous personal injury cases, including motorcycle accidents, bicycle accidents, Uber accidents, commercial vehicle accidents, pedestrian accidents, workplace accidents, slip-and-fall accidents, product liability, and wrongful deaths. You can trust that your case is in good hands with our team of experienced personal injury lawyers.
Get top-notch legal assistance from the best auto accident attorneys California trusts! Call today at (888) 488-1391 for a free, no-obligation consultation.
