how car accidents can affect your rate
Once the dust (and the claim) settles after a car accident, you may wonder how it'll affect your car insurance rate. Every situation is unique, but we'll give you a better understanding of when and why your premium may or may not go up.
Rate increases after a car accident
The best-case scenario, from our perspective and yours, is that you never get into an accident. But accidents do happen, which is why you have car insurance in the first place. When the unexpected happens, your insurer will help you through the process from initial claim to settlement. If your rate will increase because of a recent claim, you'll likely find out about it when your policy renews. But here's the good news: rates don't automatically go up.
Rates don't always go up…
We discredit this myth elsewhere, but it certainly bears repeating: car insurance rates don't always go up after an accident. Minor accidents and fender benders may not translate to a rate increase — particularly if you have a history of otherwise-safe driving.
The same goes for fault. If you weren't at fault in an accident, your premium could stay the same. Some insurance policies also include accident forgiveness, which rewards safe-driving patterns by looking at your driving record on the whole (and not just a recent incident).
But sometimes rates do increase
Just as rates may not rise after a minor accident you didn't cause, your premium is more likely to increase after a major at-fault accident. Your driving record is a major factor in determining your premium, so a recent blip can have an impact when your policy renews.
And if you had a safe-driving discount on your policy that was awarded for a claim-free driving record, the loss of that discount would also cause a rate increase.
How long do rates stay raised?
After an accident (or moving violation, for that matter), your driving history follows you around longer than you probably want it to. Insurance companies usually factor in the severity of the accident and the cost of damages to determine the increase and the length of time you'll be subject to higher rates. Your accident surcharge may gradually decrease each year you go without another accident. In many states, the surcharge will be lowered gradually over the span of 3 years until it's nonexistent as long as you avoid another accident.
We're here to help
Remember, you have a car insurance policy for a reason. Even if you get a rate increase after an accident, your coverage probably saved you money by helping to pay for post-accident expenses.
To make sure you get the most from your insurance policy, you generally want to have the most coverage you can comfortably afford. If you're an Esurance customer and you have questions about your rate or your coverage options, give us a call at 1-800-ESURANCE (1-800-378-7262).
If you're not a customer and you're interested in finding out what you'd pay for a policy with Esurance, start your free quote here.
Myth: car insurance rates automatically rise after a claim
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