The Duration of Auto Accidents on Driving Records
The impact of an auto accident on your current insurance rates depends on the date of the incident. In general, insurance rates tend to return to normal within three to five years after an accident, allowing sufficient time for the incident to be cleared from your driving record. Some insurance companies may also consider whether you have taken steps to become a safer driver since the accident, such as completing a safe driving course.
Following an accident within the past six months, expect an average increase of about 60% in your insurance rates upon policy renewal. However, this increase gradually decreases over time. Two years after an accident, insurance rates are about 47% higher than prior to the incident, while after four years, the increase is only about 2.4%. By five years after the accident, rates should return to normal.
Insurance companies believe that individuals who are at fault for an accident and make a liability claim are more likely to have another accident in the future. Consequently, insurance companies tend to charge higher rates for individuals with a history of accidents. However, the longer ago the accident occurred, the less likely it will affect your insurance rates.
Exceptions to this rule exist. Insurance companies may not raise rates as much if you are not at fault for the accident, but determining fault can be complex. If you were at least 50% at fault, you may not have to pay more for car insurance. However, if you are a new policyholder, your rates may still increase even if you are only half responsible. Proving that you were not responsible for an accident can be challenging.
Certain circumstances do not result in increased insurance rates. These include accidents where the policyholder was lawfully parked, reimbursed by the responsible party, rear-ended without moving traffic violations, involved in a hit and run reported to authorities, not ticketed while the other driver was, or where the accident was caused by non-person-related factors (e.g., animals, weather events).
Insurance companies typically review the last three years of your driving record when determining rates. Therefore, accidents that occurred five years ago should not impact a new policy, particularly if you have been with the auto company for several years and are enrolled in an accident forgiveness plan.
No-fault accidents usually result in a 12% increase in insurance rates. However, this varies by insurance company and state regulations. For example, some states prevent insurance companies from raising rates for not-at-fault accidents.
To prevent insurance rates from increasing after an accident, consider asking about other discounts, increasing your deductible, reducing coverage, shopping around, boosting your credit score, and taking defensive driving courses. These strategies can help keep your rates down and potentially remove tickets or points from your driving record.
Switching car insurance companies after an accident is possible, but it is important to ensure you have a new policy in place before canceling the old one to avoid coverage gaps. However, the insurance company you had at the time of the accident will still handle the claim, even if you change insurers. It is advisable to wait for the claim to be processed before switching and settling to avoid dealing with multiple insurance companies simultaneously.
Accident forgiveness can help prevent rate increases after an accident, but it is not always a guarantee. Limitations and state regulations may apply. It is crucial to understand the pros and cons and consider whether accident forgiveness is worth the additional cost.
Chargeable accidents are those for which you are responsible. Insurance companies determine whether an accident is chargeable based on factors such as fault percentage, property damage, bodily injury, or death. Chargeable accidents lead to increased premiums. Each state has its own criteria for defining chargeable accidents.
Not all accidents result in increased insurance rates. Accidents that were unavoidable or involve parked cars, rear-end collisions without moving violations, hit-and-run incidents reported to authorities, accidents where no ticket was issued to the policyholder, accidents caused by non-person-related factors, and accidents caused by defective tires are not considered chargeable.
