How Much Does Insurance Increase After an Accident? (2024)

Sarah Edwards

Contributor

Reviewed By Adam Ramirez, J.D.

Editor

Read in 4 mins

You have a lot to think about after an accident. You or a loved one may need medical care. If your property is damaged, you’ll need to fix or replace it. You will also worry about making it to work the next day. And if you were responsible for what happened, you may wonder, “How much does insurance increase after an accident?”

Unfortunately, there is no single answer to this question. Instead, insurance companies use unique sets of factors to calculate premium rates. However, you can look to some shared practices and principles to estimate the premium rate increases you might face.

Types of Insurance

You may have many insurance policies that cover the liability arising from an accident. Examples include:

Such policies are known as liability insurance. In these agreements, an insurer promises to pay third parties for any legal liabilities incurred by a policyholder. This is a complicated way of saying that victims get paid by the insurer after they prove someone on the policy was liable for their injuries.

Liability insurance is a form of spreading risk. Everyone buys insurance, and only a few will get into accidents. Since it could happen to anyone, everyone shares the cost and risk when purchasing it. However, insurers do not distribute the costs and risks equally. They charge higher premiums to people who pose a higher risk.

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Factors Liability Insurers Use to Set Rates

The answer to “How much does your insurance go up after an accident?” depends on many factors. With only a few exceptions, the type of accident you had does not matter. These same principles apply to liability insurance policy premiums whether you hit a motorcycle or someone slipped in your bathroom.

Fault

Fault determines whether a liability insurer must pay a claim. Liability insurance usually excludes intentional acts. Thus, to prove liability, the other party must show you were negligent in causing their injuries.

Negligence means you failed to exercise reasonable care. If you were driving, negligence might indicate that you were inattentive or careless. If someone slipped on your floor, it might show you knew about a puddle on your floor but failed to clean it up promptly. Insurers will charge higher premiums for people who cause accidents.

Damage

If you were at fault for someone else’s injury, your insurer must pay the following expenses for the victim:

  • Past and future medical expenses
  • Income losses
  • Diminished earning capacity
  • Pain and suffering

More extensive damage and serious injuries will cost your insurer more money. The insurer must recoup these losses somehow, so it will likely raise your premium rates. Moreover, the more you cost the insurer, the more it increases your rates.

Additional Factors for Auto Insurance

If you caused a car accident, motorcycle accident or another kind of traffic crash, the insurer may look at a few additional factors when setting your premiums. Remember, the insurer is responsible for any liabilities you create. If you appear to pose a high risk, it will charge you a high premium.

After your crash, the insurer might look at the circumstances to determine whether to raise your rates or even reject you as uninsurable. These circumstances include:

  • Did you get a traffic citation for causing the crash?
  • Was your driver’s license suspended?
  • Did the collision result from driving under the influence?
  • Were you charged with reckless driving?

The insurer might also look at how the crash happened. Some drivers ask, “I rear-ended someone; how much will my insurance go up?” Rear-end crashes are common, and an insurer might not raise your premiums considerably if you get into a minor one.

If a Car Accident Is Not Your Fault, Does Your Insurance Go Up?

Some insurers raise rates whether you were at fault or not. However, this is not a uniform practice among auto liability insurers. If you were not at fault, the insurer has no reason to think you are a risky driver.

However, there is one exception to this rule. Some states require vehicle owners to buy no-fault insurance. Under this system, your insurer pays for at least part of your medical bills and income losses after a minor crash.

The no-fault name comes from the fact that everyone’s insurer pays the people in the cars they insure. Thus, even the at-fault driver receives insurance benefits in a no-fault system. No-fault insurers will almost always raise premiums after all crashes that result in a claim, even if you were not negligent, simply to recoup its payout.

Learn More About Insurance With ConsumerShield

ConsumerShield educates consumers about their legal rights. After a crash, we evaluate your case and help you understand your options. We can also connect you with a lawyer to represent you in any litigation involving your accident. Contact us to schedule your free case evaluation.

Frequently Asked Questions

  • Your rates could jump significantly. If your crash resulted in a ticket for DUI, your insurance could jump even further. Alternatively, you might even become uninsurable.

  • A single car accident can raise your premiums. Insurers look at two factors. First, they check whether you were negligent in causing the crash. Second, consider the cost of the claims you filed. If the accident was your fault, the insurer will raise your rates.

  • Insurers use your crash history to set your premium rates. As time passes after your accident, its impact on your insurance rates will diminish. After three to five years, the company will no longer consider the crash.

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