February 23, 2018
It’s common knowledge that if you’re in an auto accident and file a claim your insurance rates are likely to go up. Many people decide not to report minor damage in fear of seeing their rates skyrocket.
According to one report, if you file an auto insurance claim of $2,000 or more your premiums will probably go up, on average, by 41 percent. If you file two claims in a single year, your increase could be about 93 percent. The good news, if there is any, is that premium increases may only last three to five years and then they decrease.
What Affects Your After-Accident Premium Increases?
Keep in mind that a lot of factors go into whether, and how much, your premiums might go up after you file a claim:
- The state you live in – States also vary. In no-fault states, where the state requires that both the at-fault driver’s and the no-fault driver’s payout, rates will always go up. But by how much depends on the state you live in. CBSnews.com states that in Massachusetts one claim can result in a 76 percent increase, while in Maryland the increase might be just 22 percent.
- Your zip code – Even your zip code can influence your premiums after an accident, and in general. Moving just a few miles can result in paying sometimes substantially higher rates.
- The severity of the accident – The more the damage, the higher the rate hike, or surcharge, will be. After all, your insurance company will have to pay more. Bodily damage claims result in more expensive rates. If a DUI is involved, it can stay on your record for 10 years or more.
- Your driving record – If you have a history of safe driving a premium hike may be smaller, especially if you have been with your provider a long time. It can also influence how long you’ll need to pay higher premiums. Some companies offer accident forgiveness for customers with good riving records. This kind of policy allows a good driver to have one accident without having the rates go up.
- Whether you’re the at-fault driver or not – If the accident was not your fault, your payments probably won’t be affected. Some will increase for any damage, even if it’s minor. Some won’t hike your rates if you’re not at fault.
- Your insurance policy’s terms – Insurance companies vary widely on increases. Find out what your insurer’s policy is.
It pays to consider several insurance companies before settling on your coverage. Find out about their rate hike practices, like what kinds of situations warrant tougher hikes, how much a hike would generally be under your circumstances, and whether they offer accident forgiveness.
To get started on your research, use our quote comparison tool for auto insurance.