What Happens to Your Auto Insurance After an Accident?

Getting into a car accident is stressful enough without worrying about what it will do to your insurance rates. But the reality is that an accident — even a minor fender bender — can have a significant impact on your auto insurance premium for years to come. How much your rates increase (or whether they increase at all) depends on several factors, including who was at fault, the severity of the accident, your driving history, and your insurer's policies.

In this article, we'll explain exactly what happens to your auto insurance after an accident, how much your rates might go up, and what you can do to minimize the financial impact.

How Much Do Rates Increase After an Accident?

The size of your rate increase depends primarily on whether you were at fault for the accident. Here's what you can generally expect:

At-fault accidents: If you caused the accident, you can expect your premium to increase by 20% to 50% on average. For a driver paying $1,800 per year, that's an additional $360 to $900 annually. In severe cases — such as accidents involving injuries, DUI, or major property damage — increases can be even higher, sometimes doubling your premium.

Not-at-fault accidents: If the other driver caused the accident, your rates may not increase at all. However, some insurers do raise rates slightly after not-at-fault claims, particularly if you file a claim under your own collision coverage. This varies significantly by state and insurer. Several states, including California and Oklahoma, have laws prohibiting insurers from raising rates for not-at-fault accidents.

Comprehensive claims: Claims filed under comprehensive coverage (theft, hail damage, animal strikes, etc.) typically have little to no impact on your premium, since these events aren't considered your fault. However, multiple comprehensive claims in a short period could raise a red flag.

How Long Does an Accident Affect Your Rates?

In most states and with most insurers, an at-fault accident stays on your record and affects your premium for 3 to 5 years. The impact is typically greatest in the first year after the accident and gradually decreases over time as you maintain a clean record.

Some states have specific rules about how long insurers can surcharge you for an accident. For example, Massachusetts limits accident surcharges to 6 years, while other states set the lookback period at 3 years. Check your state's regulations or ask your insurer about their specific lookback period.

Over the full surcharge period, a single at-fault accident can cost you $1,000 to $4,000+ in additional premiums. That's why it's so important to explore every option for keeping your rates manageable after an accident.

At-Fault vs. Not-at-Fault: Why It Matters

The distinction between at-fault and not-at-fault accidents is one of the most important factors in determining how your rates will be affected. Here's a deeper look at how each is treated:

At-fault accidents are those where you are determined to be primarily responsible for the collision. This could mean you ran a red light, rear-ended another vehicle, made an improper lane change, or were driving under the influence. Your insurer will typically assign fault based on the police report, witness statements, and their own investigation.

Not-at-fault accidents are those where the other driver caused the collision. Even in these cases, you may still need to file a claim — for example, if the at-fault driver was uninsured or if you need immediate repairs and can't wait for the other driver's insurer to process the claim.

In no-fault states (like Florida, Michigan, New York, and others), each driver's own insurance pays for their medical expenses and certain other costs regardless of who caused the accident. However, fault still matters for property damage claims and can still affect your rates.

Accident Forgiveness: What Is It and How Does It Work?

Accident forgiveness is a feature offered by many insurance companies that prevents your first at-fault accident from triggering a rate increase. It's essentially a "free pass" for your first accident, and it can save you hundreds or even thousands of dollars over the surcharge period.

Here's what you need to know about accident forgiveness:

It's not free: Some insurers include accident forgiveness automatically after you've been a customer for a certain number of years (typically 5+), while others charge an additional premium for it. The extra cost is usually $50 to $150 per year.
It has limits: Accident forgiveness typically covers only one at-fault accident. A second accident will result in a rate increase — and it may be steeper because you now have two accidents on your record.
It doesn't transfer: If you switch insurers, your accident forgiveness doesn't come with you. Your new insurer will see the accident on your record and may charge you accordingly.
It's not available everywhere: Some states don't allow insurers to offer accident forgiveness, and not all companies offer it in every state where it's legal.

If you have a clean driving record and plan to stay with your insurer long-term, accident forgiveness can be a worthwhile investment. Ask your agent about adding it to your policy.

Should You File a Claim After an Accident?

Not every accident warrants filing a claim. If the damage is minor and the repair cost is close to or below your deductible, it might make more financial sense to pay out of pocket. Here's a simple framework:

File a claim if: The damage is significant, someone was injured, the other driver was at fault, or the repair cost significantly exceeds your deductible.
Consider paying out of pocket if: The damage is minor (less than $1,000-$1,500), you were at fault, and no one was injured. The long-term premium increase from filing a claim could easily exceed the repair cost.

Always get a repair estimate before making this decision. And remember: even if you don't file a claim, you should still report the accident to your insurer if required by your policy terms or state law.

Shopping Around After an Accident

One of the most effective strategies after an accident is to shop around and compare rates from multiple carriers. Here's why: different insurers penalize accidents differently. One company might increase your rate by 40% for an at-fault accident, while another might only increase it by 20%.

This is especially true if you've been with the same insurer for a long time without comparing rates. Your current insurer may have been the cheapest option before the accident, but that doesn't mean they'll be the cheapest after it.

When shopping after an accident, be upfront about your driving history. All insurers will check your motor vehicle record (MVR) and claims history, so there's no benefit to hiding an accident — and doing so could result in your policy being cancelled.

Services like Apex Coverage Group can help you compare quotes from multiple carriers quickly, making it easy to find the best rate even with an accident on your record.

Tips for Keeping Your Rates Down After an Accident

Take a defensive driving course — some insurers offer a discount that can partially offset an accident surcharge
Increase your deductible — this lowers your premium and can help offset the rate increase
Ask about accident forgiveness — if you haven't used it, now is the time
Bundle your policies — multi-policy discounts can reduce your overall cost
Maintain continuous coverage — a lapse in coverage can result in even higher rates
Compare quotes annually — the insurer that charges you the most for an accident today might not be the cheapest next year

For more strategies, read our complete guide to 7 proven ways to lower your auto insurance premium.

The Bottom Line

An accident doesn't have to mean years of sky-high insurance premiums. While at-fault accidents will typically increase your rates for 3 to 5 years, the size of that increase varies widely between insurers. Accident forgiveness, defensive driving courses, higher deductibles, and — most importantly — shopping around can all help you find affordable coverage even after a collision.

Don't just accept your renewal rate after an accident. Compare quotes, ask about discounts, and make sure you're getting the best deal available for your situation.

Related articles: